Buying a Home From a Family Member With an FHA Loan
According to the FHA official site, “Certain types of loan transactions affect the amount of financing available to a borrower and how the maximum mortgage amount is calculated. These transactions include
- identity-of-interest
- properties with non-occupying co-borrowers
- three- and four-unit properties
- properties where a house will be constructed by a borrower on his/her land,
- and/or as a licensed general contractor
- payoffs of land contracts, and
- transactions involving properties under construction, or less than a year old.”
- 85% of the appraised value, or
- the appropriate LTV factor applied to the sales price, plus or minus required adjustments.”
FHA loan rules DO permit one family member to sell a home to another relative using an FHA insured mortgage loan–and if the borrower meets the criteria above, the 85% limit can be waived. Talk to your loan officer for more information on your specific needs to see which part of these rules may or may not apply in your situation.
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