FHA Loan for Single Family with 2 Houses on Property

4 Replies

I am looking to purchase a home FHA but it has 2 houses on the lot. 1 house will pass FHA no problem, the 2nd house will not pass FHA and is currently uninhabitable. Our plan would be to rehab the 2nd home for future rental.

My question is will the FHA inspector allow this property to have an FHA loan. Does each home need to pass FHA if we are not living in the 2nd home.

Thank you in advance!

What is it zoned? Duplex then no. 

What does the seller think the value of the uninhabitable house is-- ie if an appraiser only values one house will there be comps with same square footage that sold for this price in past 3 months? Value is also a problem.

An appraiser is not going to exclude the second house, so either seller tears it down or fixes it to health and safety codes.

What is the cost to bring it to code?

@Caroline Gerardo Thanks for the quick reply. It's zoned single family. I would say less than 10k to make it pass FHA, but the seller has mentioned that they will not make any additional repairs. And the offer we made should appraise with just the 1 house. Thank you!

Change your loan to 203k, if your lender doesn't do them or failed to mention, switch lenders today. You need a contractor to do a detailed estimate of the repairs today. The estimate is reviewed by Underwriter.