Can State Agencies and Non-profits use FHA Insurance?
Government and non-profit organizations can purchase homes with FHA-insured mortgages under the criteria specified below.
Non-profits
A non-profit agency may receive FHA-insured financing on a property that is intended for sale or lease to low-income and moderate-income individuals (i.e. those who earn less than 115% of the median income). The agency’s eligibility for FHA programs and ability to repay must be determined by the relevant HOC and DE lender, respectively. Also, the lender must confirm the agency’s status as a participating non-profit organization.
The non-profit will meet the following requirements to be eligible for FHA insurance:
- It must be a 501(c)3 tax-exempt organization
- The agency must have a voluntary board, and none of its members are allowed to benefit financially from any of the agency’s transactions
- It must demonstrate that it has already been a provider of low-income and moderate-income housing for at least two years.
Government Agencies
To obtain FHA insurance, state and local government agencies must be able to show that they have the legal authority and ability to borrow loans, that they are not in bankruptcy, and that the lender would not be prevented a deficiency judgment (if applicable) on behalf of the FHA in case of foreclosure. These agencies, if they qualify, may present loan applications under the DE program without needing a HOC’s approval.
Was this article helpful?
(No Ratings Yet)
Loading ...