How can we tell if the property will Qualify for  FHA 203(b) financing ?  This is a frequently asked question among buyers planning to finance a home purchase using a FHA 203(b) loan.  A 203(b) loan requires that the home being financed meet certain criteria.  Any issues regarding health, safety and structural must be corrected including defects such as: 

Foundation problems -Cracks in the slab or walls

Roof  - Damage or missing shingles, leaks or extremely old roof
Bad Plumbing systems - Leaks, backup overflow or& poor water pressure

Electrical problems - Loose wires, non working breakers.

Dangerous flooring hazards - missing flooring, unstable floor structure
Mold
Damaged or rotten siding
Damaged HVAC system

Missing appliances

Broken windows

Unsecured or unsafe doors

The home can still meet FHA 203(b) guidelines if it needs cosmetic work and other updates, as long as the deficiencies have nothing to do with health, safety or structural.  One way to make sure the property meets FHA 203(b) requirement is to find a HUD home.  HUD homes have been pre-inspected.  Each listing will state whether  the property qualifies for 203(b) financing (insured and uninsured).   An insured property will document any required repairs and itemize them in the repair escrow.  An uninsured property is not eligible for FHA 203(b) financing.   

Another way is to work with an experience Realtor who can direct you to properties that meet FHA 203(b) guidelines.  A knowledgeable Realtor will not only help you find the right property, but can help you avoid wasting time and money with properties that don't meet the guidelines.  Furthermore, they can help identify sellers who won't or can't afford to make repairs to correct the deficiencies.