Glossary & Terms

FHA loans are part of a group of loans that are insured by the federal government. This means that instead of actually lending money, the FHA insures banks and private lenders that they will cover losses they might incur in the event that the borrower does not repay the loan in full or timely.

If you are planning on getting FHA financing the property will be subjected to FHA Minimum Property Standards. This is something you should talk to your inspector about. The appraiser is the one who reports that these minimum standards are met and this can happen outside of the due diligence period. If the minimum standards are not met, you may be out of your due diligence period and the seller may not agree to make the repairs required to close the loan.