Quickly Selling a Home with an FHA Loan on It
You remember all too well how difficult it was to buy a house with your Federal Housing Administration (FHA) loan. Of course, you were grateful to have it since you were still struggling to reestablish good credit at the time. Back then, you didn’t have access to a lot of cash to use as a down payment. So, getting approved for an FHA loan meant that your dream of owning a house could actually come true.
The problem was that a lot of sellers didn’t want to take an offer from an FHA-backed buyer since these loans can take a while to close. Then, there were some houses that didn’t meet the FHA’s minimum standard requirements. So, finding a house that you loved and that your lender approved of was almost as difficult as making an offer that had a chance of getting accepted.
The good news is, it all eventually worked out. The bad news is, you’ve now got to move out. And it has to happen fast since you’ve got a new job overseas or, perhaps, you’re going through a divorce. Will selling a home financed with an FHA loan be as hard as it was when you bought it? It certainly doesn’t have to be. In fact, it can be easy—even when you need to sell quickly.
Any buyer is potentially viable, regardless of their path to financing—even a buyer with their own FHA loan.
How FHA Loans Work
Though many home buyers benefit from the more lenient qualifications attached to FHA loans, the loan products themselves were actually designed to protect lenders. The Federal Housing Administration doesn’t actually lend money to borrowers; rather, it provides mortgage insurance to banks and credit unions that do. This allows traditional lenders to take on higher-risk clients, such as those with low credit scores or without the ability to make a down payment of 10% or more. And, it gives buyers the opportunity to borrow money for a home where they otherwise might not have been able to.
What the FHA won’t do, of course, is approve a loan for a home that has significant problems. So, when a homeowner tries to sell a house with foundation damage or mold issues, they have trouble enticing buyers with FHA-backed loans. In fact, you may have run into this when you were shopping for a house. Even a house with heavy adjacent traffic, a nearby airport, or unfortunately placed power lines can be reason enough for an FHA lender to say no to a deal. If the condition of a house—and/or its location—isn’t ideal, the Federal Housing Administration simply won’t take the risk.
There are few restrictions that come with an FHA-insured mortgage once it has been used to buy property.
Selling a Home Financed with an FHA Loan
As the seller of a home financed with an FHA loan, however, you won’t really face any issues that could keep you from selling the house—not any that are linked specifically to your loan, anyway. There are few restrictions that come with an FHA-insured mortgage once it has been used to buy property. So, as long as you’ve lived in the house for at least 90 days, the process for selling it is pretty much the same as for any home financed with other kinds of loans. Any buyer is potentially viable, regardless of their path to financing—even a buyer with their own FHA loan.
Is the Home In Need of Major Repairs?
Major repair needs could get in the way, however. If you’re trying to sell a house that needs a new roof because a severe storm caused irreparable damage a few years back, for example, you will have trouble attracting FHA buyers. Remember, any home that needs major repair work won’t get approved for an FHA loan. That can greatly reduce your pool of qualified buyers. In fact, regardless of the financing option, most buyers who want a move-in ready home won’t offer on a house that needs a lot of work, anyway—not without asking that repairs be performed.
Do You Need to Close the Sale Fast?
Even with a house that is in pretty good shape, you may have trouble finding the right buyer if you need to close fast. Both conventional and FHA loans typically require at least 30 days to close from the date of acceptance. As you know, buyers with FHA loans may need even longer since it’s not unusual for the approval process to take more time. And, when you’re trying to sell a house for a job relocation or because you’ve fallen behind on your payments and don’t want to risk foreclosure, your time is valuable.
Selling a house quickly will always be easier when you sell directly to an all-cash buyer.
No matter the financing details, selling a house quickly will always be easier when you sell directly to an all-cash buyer. Typically able to close fast and take a home as-is, reputable cash buyers remove any worry over whether the transaction will move forward or if you’ll have to make repairs. It won’t matter, either, whether the home is still financed or paid off in full. If they can give you a fair cash offer, they certainly will. And there is one particular buyer who will even help you decide on the best way to sell your home—and to whom—if it turns out that their offer is not the highest.
Sell Quickly for Cash Even When Your Home Is Financed
For all of our clients here at Sell Your House Direct, we recommend the best selling solution based on each individual’s unique situation. So, whether they’ve got deferred maintenance on a house that they’ve lived in for years or need to leave a home they’ve just bought because a parent has become ill, we can offer the help to suit their needs.
Usually, selling the house to us for all cash is the best direction to take since we can close in seven days or less—even when a client is selling a home financed with an FHA loan. At other times, putting the house on the market with a real estate agent is actually a much better deal. When it is, we suggest it and do what we can to make that process easy, too, even providing referrals for reputable agents.
The bottom line is that we want to make sure your experience selling your home is as stress-free as possible and that you also net the highest possible return. As trusted real estate advisors—not just all-cash-buyers—it’s a part of the job. But, it’s also part of our core values.