Concessions

• Most lenders require borrowers to make down payments of at least 20 percent, but people who take out FHA-backed loans only have to make down payments of 3.5 percent. The FHA allows buyers to reduce their upfront costs further by having the seller pay some of their closing costs. As a seller, you can make a contribution towards the buyer's closing costs of up to 6 percent of the purchase price. While you may not see the advantage in doing that, some sellers bump the sale price up to absorb this cost so that they get the price they want and the buyer has minimal out of pocket costs. Most other types of loan products do not allow for seller concessions.
  
  

Appraisal

• During a home appraisal, a state certified home inspector visits the property and determines its worth based on recently sold, comparable properties. However, FHA appraisals require home appraisers to not only put a value on a home but also to look for safety hazards like faulty wiring, leaks in the roof and flaking lead paint. The seller must arrange to have any safety issues rectified prior to the sale of the home. You can negotiate the cost of these repairs into the sale price with the buyer.
  
  

Time Minimum

• If you are planning to sell a house that you recently purchased, then you should not attempt to sell it to someone who plans on using an FHA-backed loan to buy it. A common illegal practice is the purchase and selling of homes between a pool of people with the sole intention of driving prices up before selling them at inflated prices. To prevent such scams from occurring, the FHA does not back any loans used to buy properties that the current owner own for less than 90 days.
  
  

Condominiums

• The prices of condominiums are more volatile than the prices of other kinds of real estate. This is partially due to high vacancy rates, which can lead to shortfalls in the funds that cover insurance and maintenance costs. Consequently, the FHA only insures loans used to buy condos placed on the list of FHA-approved properties. These condos must meet guidelines related to owner occupancy rates, size and other factors. At one time, you could submit an application to have a condo approved by the FHA during the sale process. The FHA no longer uses this practice, however, and will only back loans on condos certified prior to receiving the mortgage application.