FHA Loans

We have accepted our first FHA loan on a home, and I am not sure we knew what we were getting into. The inspection process for an FHA loan is much more comprehensive than for any other loan.

A few minor items showed up on the first inspection of the home, we promptly took care of these. Then a FHA inspector checked out the house. We received four pages of major items that had to be corrected in order for the loan to be approved.

They were all taken care of and ranged from replacing wood planks with small holes in the house to repainting parts of the house.

The house sits on pier and beam and the FHA inspector had concerns about the bracing of the house and insisted that a structural engineer also inspect it. Fortunately for us, this inspection disclosed no problems.

Finally, after a week of additional work we passed out final inspection and we closed on the house on Friday.

FHA loans allow more people to qualify for home loans, but it does mean more work for the seller and additional costs for the buyer.

How do we pick the houses to rehab?

We do not have a set procedure for picking houses we rehab or even for finding houses to purchase. However, we are becoming smarter in our selection of houses. The first house we purchased had no plumbing. It sat on pier and beam and someone had gotten underneath and stolen the copper pipes. We did not find this out until after we had bought the house. That of course added quite a bit to the cost of remodelling the house. I found this house just driving around looking at houses. We bought it from another rehabber who started the project and ran out of money. We now know why.

Two of the houses we have purchased we learned about by word of mouth, just asking the right person who knew someone that had a house for sale.

I answered an ad in the newspaper about a house for sale and it was owned by someone I went to high school with. We then bought a second house from him, and it is the house we have under contract now.
We have turned down houses when the asking price was too high, and or the repairs were going to be too extensive.


Our current process involves having the realtor, contractor and my wife and I look at the house. The contractor gives us his opinion on the cost of repairs needed, and our realtor tells us what she thinks the house will sell for. All four of us have to agree that it's a good deal. We recently decided that we will also pay an inspector to give us his opinion, so we can avoid surprises like the ones we got on the first house we did.

Project house update

Work on our current project has been at a standstill for almost two weeks now. Our entire crew has had the flu, as it has affected hundreds of Midlanders recently.

However, we have had the electricty turned on, so when work does resume on Tuesday (Monday is a Holiday), it should move quickly.