What is the real difference between new construction and existing construction on an FHA loan? The distinction affects which appraisal rules apply, what paperwork a lender needs, and how much protection a borrower gets before closing. FHA loan guidelines draw a clear line between the two categories, and knowing where a property falls can help buyers set the right expectations from the start. Existing Construction A property counts as existing construction once it has been fully finished for over a year, or finished for less than a year but already lived in at some point. The appraisal process for existing homes differs somewhat in timing, paperwork, and required forms, but the detail that matters most to a typical borrower is what the appraisal is not meant to do. An FHA appraisal, or the results of a compliance inspection ordered to satisfy a loan condition, is not a substitute for a home inspection. Neither one tells a borrower whether a home is safe to buy. That’s why a separate, optional home inspection is worth arranging and paying for; it’s the only real way to know whether a house is fit to purchase. Timing looks a little different for existing homes than […]
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