For first-time buyers using FHA

Buying with FHA in Homestead: what passes, what does not

Almost everything written about FHA is written by lenders, about the loan. This page is the other half, and it is the half that decides whether your contract closes: which houses in Homestead, Florida City and the Redland will pass an FHA appraisal, which will not, and why. I am a real estate agent, not a lender - so anything about qualifying, credit, rates or how much you can borrow belongs with a licensed mortgage lender, and I say so wherever it comes up. Everything here is checked against HUD's own handbook and dated, because FHA figures are reset every year.

Updated 2026-10-05

Where my lane ends, and what is in range

Here is the line, stated once so I do not have to re-state it in every paragraph below. If the question is about the loan, ask a licensed mortgage lender. If it is about the house, ask me. Qualifying, credit, debt-to-income, interest rates, how much you can borrow, and whether you are eligible for any particular down payment assistance program are loan questions, and they belong with a licensed mortgage loan originator - not with me, and not with any other real estate agent.

That is not false modesty, it is the law. Mortgage origination is licensed activity under the federal SAFE Act, and in Florida under Chapter 494 of the Florida Statutes. Section 494.0025 makes it unlawful "to act as a loan originator in this state without a current, active license issued by the office." Section 494.001(18) defines a loan originator to include an individual who, directly or indirectly, "negotiates or offers to negotiate the terms or conditions of a new or existing mortgage loan on behalf of a borrower or lender" - and note how wide "offers to negotiate" is. There is no exemption in that section for real estate brokers or sales associates. So you will not find a payment estimate, a rate, or a sentence telling you what you can afford anywhere on this page.

What is left over is not a scrap. It is most of what actually goes wrong. FHA's property rules run to dozens of pages and are almost entirely about the house: the roof, the water heater, the paint, the drainage, the power line over the back yard, the condominium's paperwork. A lender cannot see any of that from a desk. Look at how HUD divides the work - the lender orders the appraisal, the lender decides which repairs are required, the lender submits a condominium single-unit approval request, and the 203(k) consultant who writes the scope of work comes off an FHA roster. In every one of those, someone has to know what the house is going to do before the appraiser arrives. That is the agent's job, and it is the part of FHA that is written about worst.

I am not going to tell you how many FHA deals I have closed. Closing records do not record the financing type, so any number I gave you would be invented, and I do not publish transaction counts in any event - they go stale and they tell you nothing about whether the work was any good. What I will do instead is be specific and checkable. Every rule below is tied to the HUD document it comes from, and every figure carries a date, because FHA figures are reset annually and a stale number on a licensed agent's website is worse than no number at all.

FHA is not a first-time buyer program, although first-time buyers are most of who uses it. HUD's FY2025 report to Congress on the Mutual Mortgage Insurance Fund puts first-time buyers at 83.03 percent of FHA forward purchase mortgage endorsements - which is a statement about who uses FHA purchase loans nationally, not about who is allowed to, and not a statement about Homestead. Roughly the other sixth went to repeat buyers. I have found no reliable figure for the FHA share of sales in Homestead or Florida City specifically, so I am not going to estimate one. For reference, the definition FHA itself uses in Handbook 4000.1 is an individual who has not held an ownership interest in another property in the three years prior to the case number assignment, and it also covers someone divorced or legally separated who has had no ownership interest in a principal residence other than a joint interest with a spouse over that same period. Note that the clock runs to the case number assignment rather than to your closing date, and that other programs write their own definitions. Whether any of it does anything for you in a particular program is a lender question.

Now the number everybody wants. For FHA case numbers assigned on or after January 1, 2026, the FHA forward mortgage limit for a one-unit property in Miami-Dade County is $667,000. For two units it is $853,900, for three $1,032,150, and for four $1,282,700. Those are HUD's published calendar-year 2026 figures, from Mortgagee Letter 2025-23 dated December 11, 2025 and from HUD's own county loan-limit data file, which I pulled on October 5, 2026. In practice it means a one-unit home priced at or below $667,000 is in range for FHA financing on the county-limit test. What you personally qualify to borrow is an entirely separate question, and only a licensed mortgage lender can answer it.

Two things about that figure. First, it is set by metropolitan area rather than by county, using the county with the highest median price within the area, which is why Broward and Palm Beach carry the identical $667,000 - I checked all three in the same data file. HUD does flag Miami-Dade as a high-cost area, but that means only that its limit sits above the national floor - do not let anyone imply it means the ceiling figure. For national context, and labeled as national: the 2026 one-unit floor is $541,287 and the one-unit ceiling is $1,249,125. Miami-Dade sits between them. Second, the number moves. The Miami-Dade one-unit limit for 2025 was $654,350. It is republished every year, usually in December, so check it rather than trusting a figure on a page like this one - including this one, after December. HUD's own lookup is at entp.hud.gov/idapp/html/hicostlook.cfm, and the full county data file behind it is the only other source I would use.

What an FHA appraiser is actually looking for

The standard is three words. HUD's Minimum Property Requirements, in its own language, "refer to general requirements that all homes insured by FHA be safe, sound, and secure." Minimum Property Standards are the parallel set that applies to new construction; on a resale you are dealing with MPR. That is the whole test. It is not a condition grade, not a quality standard, and not a renovation list, and everything in the next two sections is downstream of those three words.

The appraiser is required to limit what they call for, which is the single most useful fact a nervous seller can be told. Handbook 4000.1 says the appraiser "must limit required repairs to those repairs necessary to: maintain the safety, security and soundness of the Property; preserve the continued marketability of the Property; and protect the health and safety of the occupants." An FHA appraiser cannot require a cosmetic upgrade. And on age: "If an element is functioning well but has not reached the end of its useful life, the Appraiser should not recommend replacement because of age." Nothing here gets replaced for being old.

Nor does the appraiser have the last word. "Regardless of the Appraiser's suggested repairs, the Mortgagee will determine which repairs are required." Mortgagee means lender. The appraiser flags; the lender decides. That is the correct response to "the FHA appraiser is making us fix the fence" - the appraiser proposed it, the lender has discretion over whether it becomes a condition of the loan, and that is a question worth asking rather than a bill worth conceding. HUD describes the appraiser as "the on-site representative for the Mortgagee" who "provides preliminary verification" that the property meets the acceptability criteria. Preliminary is doing real work in that sentence.

What the lender decides does, however, drive the calendar. "The Mortgagee may only approve a Property after the Mortgagee confirms that all defects reported by the Appraiser have been corrected," and "when defective conditions exist and correction is not feasible, the Mortgagee must reject the Property." So required repairs are not a credit to be haggled over at closing - they have to be done and verified before the loan can be approved. That is why an FHA repair call in week four moves the closing date, and why it is worth finding the likely calls in week one.

HUD also names, in writing, the things that are not required, and the list is worth reading because every item on it still gets argued about. An as-is appraisal is permitted on an existing home where minor deficiencies from deferred maintenance and normal wear and tear do not affect the health and safety of the occupants or the security and soundness of the property. HUD's examples of what is cosmetic: "missing handrails that do not pose a threat to safety, holes in window screens, cracked window glass, defective interior paint surfaces in housing constructed after 1978, minor plumbing leaks that do not cause damage (such as a dripping faucet), and other inoperable or damaged components" that in the appraiser's professional judgment pose no health and safety issue.

Which kills the most durable myth in this business: FHA does not require handrails. There is no general minimum property requirement that stairs have a handrail. The handrail rule people quote at each other - repair damaged or missing handrails or stair treads on elevated exterior porches, patios, decks and balconies where the drop to the ground is greater than 18 inches - lives in Part III of the handbook, which governs servicing and loss mitigation: what a lender must do to preserve a property it has already taken. It is not in the Part II.D appraisal requirements for a resale purchase. On a normal purchase a missing handrail is repairable only if it genuinely poses a safety threat, which is exactly what the cosmetic list says. A great many FHA pages get this wrong, and sellers pay carpenters because of it.

Another piece of lore to retire: FHA appraisers no longer report a property's remaining economic life. Mortgagee Letter 2025-18, "Rescission of Outdated and Costly FHA Appraisal Protocols", dated June 27, 2025 and effective immediately, removed that reporting requirement along with the excess photograph requirements and the redundant requirement for additional comparable sales in changing markets. If someone tells you an FHA appraiser will reject your house for having too little economic life left, they are quoting a rule that no longer exists. It did not touch the two-year roof rule, which is very much alive and is the first item in the next section.

Last, and most important for you rather than for the seller: the FHA appraisal is not a home inspection, and HUD says so more bluntly than I would. The disclosure a lender must give you at first contact, form HUD-92564-CN, is titled For Your Protection: Get a Home Inspection and states "Appraisals are NOT Home Inspections!" and "FHA does not perform home inspections." It explains that an appraisal "is required to estimate the home's value for your lender and does not replace a home inspection," that "FHA does not guarantee the value or condition of your new home," and that if you find problems after closing, "FHA cannot give or lend you money for repairs, and FHA cannot buy the home back from you." Hire your own inspector. The appraiser is working for the lender.

The house: what gets flagged on a resale here

These are the items worth checking on a south Miami-Dade resale before anybody writes an offer, starting with the ones that are both common in this housing stock and knowable in advance. All of them come from HUD Handbook 4000.1, Update 18, which was issued August 12, 2026 and which I checked against on October 5, 2026.

The roof, and the two-year rule. The appraiser must notify the lender of a deficiency where the roof covering "does not prevent entrance of moisture or provide reasonable future utility, durability and economy of maintenance and does not have a remaining physical life of at least two years." Where the roof has under two years left, the appraiser "must report if the roof has less than two years of remaining life, and make the appraisal subject to inspection by a professional roofer." Where the roof cannot be seen, the appraiser "must explain why the roof is unobservable and report the results of the assessment of the underside of the roof, the attic, and the ceilings" - and in the attic, "evidence of a deficient condition (such as a water-stained ceiling, insufficient ventilation, or smell of mold)" sends the appraisal subject to inspection or repairs on its own. On older entry-level stock here this is the most common single problem, and it is also the most knowable: pull the roof permit date before anyone writes an offer. Your insurance quote will care about the same roof for entirely different reasons.

The water heater, which comes down to one valve. "The Appraiser must examine the water heater to ensure that it has a temperature and pressure-relief valve with piping to safely divert escaping steam or hot water." That valve and its discharge piping are the entire water heater requirement - not the age, not the capacity, not the brand. A missing or unpiped relief valve is a cheap fix and one of the most common flags there is.

Plumbing. The appraiser flushes the toilets and operates a sample of faucets, checking water pressure and flow, that both hot and cold water run, that the system is intact and emits no foul odors, and that there is no readily observable evidence of leaks or structural damage under the fixtures. A dripping faucet is on HUD's cosmetic list. A cabinet floor rotted through under the sink is not.

Heat, and then the question everybody here actually asks. The permanently installed heating system must automatically heat the living areas to a minimum of 50 degrees Fahrenheit in all gross living areas, provide healthful and comfortable heat, be safe to operate, rely on a fuel source readily obtainable in the area, and operate without human intervention for extended periods. On air conditioning: "Central air conditioning is not required but, if installed, must be operational." If it is installed and dead, the appraiser indicates the level of deferred maintenance, analyses and reports the effect on marketability, and includes the cost to cure. So a broken air handler is not an automatic FHA failure in South Florida - and it is not free either.

Electrical. The appraiser must examine the system "to ensure that there is no visible frayed wiring or exposed wires in the dwelling, including garage and basement areas," and must report if the amperage and panel size appear inadequate for the property. They operate a sample of switches, lighting fixtures and receptacles inside the house, in the garage and on exterior walls. They are "not required to insert any tool, probe or testing device inside the electrical panel or to dismantle any electrical device or control." Exposed wire in a garage, usually left over from a conversion somebody did without a permit, is the local version of this.

Kitchen, and the appliance question. FHA does not require a house to have appliances. The rule is narrow: appliances "that are to remain and that contribute to the market value opinion" must be operational. The kitchen minimum is "a sink with potable running water and a stove utility hookup" - the hookup, not the stove. A house stripped of its appliances is not disqualified on that basis. More broadly, each living unit has to have a continuing and sufficient supply of safe and potable water under adequate pressure, sanitary facilities and a safe method of sewage disposal with at least one bathroom containing a water closet, lavatory and a bathtub or shower, space and heating adequate for healthful and comfortable living conditions, domestic hot water, and electricity adequate for lighting and mechanical equipment. And: "FHA does not have a minimum size requirement for one- to four-family dwellings and Condominium Units."

Paint, and the year 1978. This distinction settles more arguments here than any other, because so much of the housing stock went up after 1978. For a home built before 1978 the lead-based paint requirements apply, and the appraiser must note the condition and location of all defective paint and require repair, observing interior and exterior surfaces alike. Defective means cracking, scaling, chipping, peeling or loose. For a home built in or after 1978 the appraiser "must report all defective paint surfaces on the exterior and require repair of any defective paint that exposes the subsurface to the elements"; unpainted surfaces intended to withstand the elements, "such as stained or pressure-treated wood, do not require repair," and defective interior paint in post-1978 housing is explicitly on the cosmetic list and not required to be repaired.

Turn the utilities on. This is the one item entirely within somebody's control. If the utilities are off the appraiser must ask to have them turned on. If that is not feasible the appraisal gets completed anyway, but rendered subject to reobservation, conditioned on further observation to determine whether the systems are in proper working order once the utilities are restored, and completed under the extraordinary assumption that the utilities, mechanical systems and appliances are in working order - and the appraiser "must note that the reobservation may result in additional repair requirements once all the utilities are on and fully functional." On a vacant or bank-owned house that is a second trip, a second fee, and a second opportunity to find something. Power and water on before the appraiser is scheduled.

The lot: what is outside the walls

The appraisal does not stop at the exterior paint, and two of the items below can end a purchase outright rather than just cost somebody a repair.

The overhead power line, which is the one absolute on this page. No overhead electric power transmission line may pass directly over any dwelling, structure or related property improvement, "including pools." HUD's language is flat: "The power line must be relocated for a Property to be eligible for FHA-insured financing." The residential service drop line may not pass directly over any pool, spa or water feature either. Where the dwelling or related improvements sit inside the easement area, the lender must obtain a certification from the utility company or local regulatory agency that the relationship between the improvements and the distribution lines conforms to local standards and is safe. Hardly anybody writes about this and it is a genuine deal-killer. Look up.

Flood zone, and the correction worth having. Being in a flood zone does not make a house ineligible for FHA. A property is ineligible only if a residential building and related improvements are located within an SFHA zone - the zones beginning with A or V - and insurance under the National Flood Insurance Program "is not available in the community"; or if the improvements are, or are proposed to be, within the Coastal Barrier Resources System, in which case the appraiser must stop work and report it. HUD puts the test positively too: to be eligible, a property in an SFHA "must be in a community that participates in the NFIP and has NFIP available." Miami-Dade communities participate. So an A-zone house in Homestead or Florida City is not FHA-ineligible on that basis alone, whatever you have been told. Otherwise the appraiser reviews the FEMA flood insurance rate map, enters the zone designation, the map panel number and the map date, attaches the panel to the report and quantifies any effect on value. What flood insurance costs is a real question, and worth getting a quote on early rather than late - but it is not an eligibility bar.

Drainage and standing water. The appraiser "must make the appraisal subject to repair if the grading does not provide positive drainage away from the improvements," and must note any readily observable evidence of standing water adjacent to the foundation that indicates improper drainage. HUD names the acceptable control measures: "gutters and downspouts or appropriate grading or landscaping to divert the flow of water away from the foundation." In a flat county where rain sits rather than runs, this call comes up more often than people expect, and it is far cheaper to deal with before the appraisal than after it.

Termites, including the treatment you already paid for. The appraiser observes the foundation and perimeter of the buildings for evidence of wood destroying pests, at a lower level of scrutiny than a pest control specialist would apply. Here is the trap: if there is evidence or notification of infestation, "including a prior treatment," the appraiser must mark the evidence of infestation box and make the appraisal subject to inspection by a qualified pest control specialist. A disclosed past tenting - routine in south Florida - can by itself trigger an inspection condition. Schedule it rather than be surprised by it.

The pool. The appraiser reports readily observable defects in a noncovered pool that would render it inoperable or unusable, and a pool must be operational to provide full contributory value. Green water by itself is not a failure: "If the pool water contains algae and is aesthetically unappealing, but the Appraiser has no evidence that the pool is otherwise contaminated, no cleaning is required." A pool with unstable sides or structural problems is a different matter - the appraiser must condition the report on it being repaired or permanently filled in accordance with local guidelines, with the surrounding land regraded if necessary.

Security bars. "The Appraiser must report when the Property has security bars on bedroom windows or doors." That is a reporting duty rather than an automatic failure, but bars are common on older stock here and a seller is better off knowing in advance that they will be written up.

Access, which is a Redland problem. The property needs safe pedestrian access and what HUD calls Adequate Vehicular Access from a public or private street, protected by a permanent recorded easement, an ownership interest, or ownership and maintenance by a homeowners association. Adequate Vehicular Access means "an all-weather road surface over which emergency and typical passenger vehicles can pass at all times." A shared driveway that is not part of an association has to meet the same requirements. On an agricultural parcel reached by a shared or unpaved track, settle this before anything else.

Well and septic, with a change from this summer. Where the house is on a well, Handbook 4000.1 sets minimum separation distances for existing construction - 10 feet to the property line, 50 feet to a septic tank and 100 feet to a drain field, the drain field figure reduced to 75 feet where the local authority allows it - and where the adjoining parcel is residential, local well distance requirements prevail. Then the recent change worth knowing: on July 27, 2026, under FHA INFO 2026-17, FHA issued a broad waiver of those well distance requirements for existing construction, where the property meets the distance requirements of the local jurisdiction and the lender documents acceptable water testing results. HUD's own reasoning was that its national distances did not line up with local authorities that had already inspected, permitted or grandfathered a well in its current configuration. The practical effect on an existing house is that the governing distances are Florida's and Miami-Dade's rather than a figure off a national blog - but the waiver is conditional, it does not touch the standards for new construction, and waivers carry end dates, so have your lender confirm it is still in force. Separately, connection to a public or community water system is required whenever that is feasible and available at a reasonable cost; otherwise an existing on-site system is acceptable if it is functioning properly and meets the local health department's requirements. A well water test report may be no more than 180 days old at the disbursement date, and a shared well needs a shared well agreement plus an inspection and water testing.

Condominiums and townhouses: check before you fall in love

This is where FHA buyers lose the most time, and it is entirely avoidable. HUD's rule is short: "A Condominium Unit must be either located within an FHA-approved Condominium Project, meet FHA's definition of a Site Condominium, or have completed the FHA Single-Unit Approval process before a Mortgage can be insured." Three routes. If none of them is open, the unit cannot be financed with FHA however good the home is and however willing the seller - so this is a question to settle in the first ten minutes, not after the inspection.

Route one is the shortest list you will ever see. I ran HUD's own condominium lookup on October 5, 2026, for Florida, status Approved, search type Project: 72 projects in the entire state. For Miami-Dade County, 11. Six of those 11 carry a Homestead mailing city, and ten of the 11 carry a status date inside the last twelve months. In a county with tens of thousands of condominium units, 11 approved projects is the whole of route one - which is why, for a resale condominium here, single-unit approval rather than project approval is the realistic path. Run the search yourself at entp.hud.gov/idapp/html/condlook.cfm. I am deliberately not printing a list of project names that would be out of date by the time you read it.

Three things will trip you up on that search. The Status filter defaults to All, so Expired, Rejected and Withdrawn projects come back looking exactly like hits - an expired project is not an approved project, and you have to read the status column. The Search Type field matters just as much: left on Both, a county search returns project records and submission records together, which is why the same Miami-Dade search can report 21 rows rather than 11 - set it to Project if you want a count of approved projects. And the list carries the recorded legal project name rather than the name on the sign at the entrance, so a name search can return nothing for a project that is in fact listed. Search by city or ZIP code instead. What comes back is genuinely useful: status, status date, expiration date, the approval method, HUD's free-text comments on any approval conditions, and a live FHA concentration percentage for the project. There is a second tool as well, the condominium logging package search, which shows whether a project has an approval or recertification application in flight - something the approved list itself will not tell you.

Approvals expire, which is why the dates in those results matter. A condominium project approval runs three years from the date the project is placed on the list of approved condominiums; every one of the 11 current Miami-Dade listings shows an expiration date exactly three years after its status date. Recertification "is performed no earlier than six months prior to the Approved Condominium Project expiration date or no later than six months after the Approved Condominium Project expiration date," and "if not submitted within the stated time frames, the Condominium Project is not eligible for recertification but must re-apply for Full Review." An approval that lapsed more than six months ago is back to square one. If the project you are looking at is inside six months of its expiration date, that is worth knowing before you write an offer rather than after.

Route two is the one that quietly saves deals: "Site Condominiums do not require Condominium Project Approval or Single-Unit Approval." A site condominium is either a project consisting entirely of single-family detached dwellings that have no shared garages or any other attached buildings; or a project of single-family detached or horizontally attached townhouse-style dwellings where the unit consists of the dwelling and land, which contains no manufactured housing units, and which is encumbered by a declaration of condominium covenants or a condominium form of ownership. The unit owner has to be responsible for all required insurance and maintenance costs associated with the unit dwelling, landscaping excepted. A number of townhouse-style developments in south Dade are held in condominium form and may qualify here, which means the project never needs to appear on any list at all.

And a distinction people get wrong constantly, particularly in the Kendall corridor and Cutler Bay: a fee-simple townhome in a homeowners association is not a condominium, and there is no FHA approval list for it. The project-approval requirement applies to a mortgage secured by a condominium unit. In a planned unit development the appraiser simply identifies the PUD by name, checks the PUD box on the appraisal form and reports the association fee. If somebody tells you your fee-simple townhome has to be on an FHA approved list, they are confusing two different forms of ownership.

Route three, single-unit approval, is "approval of a Unit in a Condominium Project that is not an Approved Condominium Project" - the successor to what the market still calls spot approval. The lender does it, not you and not me, but it is worth knowing what will be checked, because most of it is the association's business rather than yours. The project must have a certificate of occupancy or equivalent for all units in the complete project or complete legal phase; a certificate for the subject unit issued at least one year ago, or the unit has been occupied; at least five units; no manufactured housing; and none of the ineligible characteristics below. Control of the association must already have transferred from the developer to the unit owners with the covenants recorded. Owner occupancy must be at least 50 percent of the total units for single-unit approval - a higher bar than the 35 percent that applies to a project already on the approved list. No more than 15 percent of total units may be more than 60 days past due on association dues or special assessments. The association must maintain separate accounts for operating and reserve funds, with the reserve account funded with at least 10 percent of the aggregate of 12 months of unit assessments unless a lower amount is justified by an acceptable reserve study. And the project must not have experienced a financial distress event - bankruptcy protection, receivership, foreclosure or seizure of assets by creditors, or a deed in lieu - within the last three years.

Then there are the headcount caps, which catch small buildings quickly. For single-unit approval, FHA may suspend the issuance of new case numbers where the FHA insurance concentration exceeds 10 percent of the total units in a project of 20 or more units; and "for Condominium Projects with less than 20 Units, the number of FHA-insured Mortgages cannot exceed two." Two. In a small Homestead or Cutler Bay building that is reached fast, and it is a concrete reason to check in week one rather than at contract. Separately, where a project is already approved, FHA may suspend the issuance of new case numbers - and may suspend project eligibility - where the FHA insurance concentration is greater than 50 percent of the total units. The FHA concentration percentage shown in the lookup results is how you see where a listed project stands today.

A few mechanics, because they tell you who can actually do something about a project that is not approved. Requests for condominium project approval must be submitted by one of the following: the mortgagee, the builder, the developer, the condominium association, the management company, a project consultant, or an attorney acting as an agent for the developer or builder, the association or the management company. A real estate agent is not on that list and neither is a buyer - but the association and its management company are, and that is the lever worth pulling. And FHA "will not pay for any fees associated with the Condominium Project Approval process." For single-unit approval, the form the association or management company has to complete is HUD-9991; the project-level questionnaire is HUD-9992. The lender orders the case number, and HUD is explicit that "the issuance of an FHA case number for Single-Unit Approval processing is not a Condominium Project Approval of the Unit nor the Condominium Project." One useful recent change: since May 26, 2026, under FHA INFO 2026-10, projects already registered in FHA Connection with a status of Expired, or Rejected - Register SUA, receive an automatic case number assignment rather than going into manual holds tracking. So a project showing Expired on the public list is often still workable through single-unit approval.

Some characteristics are an absolute no with no route around them. FHA will not approve a condominium project with cooperative ownership, or one that is a condominium hotel or condotel, a timeshare or segmented-ownership project, a multi-dwelling condominium with more than one dwelling per unit, a houseboat project, a continuing care facility, or one located in the Coastal Barrier Resources System. Those also disqualify a unit from single-unit approval, which requires that the project have none of the ineligible characteristics. There is no exception path on that list.

Two pieces of Florida law sit behind all of this and explain some of the scarcity. Section 553.899, Florida Statutes requires a milestone inspection for a building three habitable stories or more in height that is subject, in whole or in part, to the condominium or cooperative form of ownership, by December 31 of the year the building reaches 30 years of age and every ten years after that - and a local enforcement agency may require it at 25 years where local conditions such as proximity to salt water warrant. Section 718.112 requires a residential condominium association to have a structural integrity reserve study completed at least every ten years for each building on the property that is three habitable stories or higher, and requires reserves for the studied items to be based on the findings and recommendations of the most recent study. Buildings under three habitable stories are excluded from both. It is a reasonable inference rather than something I can measure that the special assessments associations are levying to fund those reserves push units into arrears and projects past FHA's 15 percent arrears and 10 percent reserve tests; I offer that as a mechanism, not as a statistic. One caveat on everything above: the condominium sections of the handbook these rules come from carry a November 10, 2026 implementation stamp, meaning lenders may apply them now and must apply them from that date. Until then practice can differ between lenders, which is one more reason to get your lender into the condominium question early.

When the house will not pass as it stands

A house that fails the minimum property requirements is not automatically a house you cannot buy. There are two mechanisms, and between them they cover most of what goes wrong on older south Dade stock.

The simpler one first. Quite separately from any rehabilitation program, a lender "may establish a repair escrow for incomplete construction, or for alterations and repairs that cannot be completed prior to loan closing, provided the housing is habitable and safe for occupancy at the time of loan closing." The escrow funds have to be sufficient to cover the cost of the repairs or improvements, and the cost of the buyer's own labor may not be included. The lender executes form HUD-92300, Mortgagee's Assurance of Completion, and certifies completion on form HUD-92051, Compliance Inspection Report. That is the answer when the required work cannot realistically be finished before closing but the house is livable in the meantime, and it is a far smaller intervention than a rehabilitation loan.

The bigger mechanism is Section 203(k), which insures the purchase and the rehabilitation of a home in a single mortgage. Part of the proceeds pays the seller and the remaining funds are placed in an escrow account and released as the rehabilitation is completed. That escrow is the whole point: work that would have failed the property requirements gets financed and performed after closing, rather than the seller having to pay for it first. The property "must be an existing Property that has been completed for at least one year prior to the case number assignment date," and 203(k) also works on a condominium unit - limited there to "the interior space of an eligible Condominium Unit excluding any areas that are the responsibility of the Condominium Association."

There are two versions, and which one you are in is decided by the scope of the work rather than by preference. Limited 203(k) "may only be used for minor remodeling and nonstructural repairs," and "the total rehabilitation costs must not exceed $75,000." That $75,000 is current as of HUD Handbook 4000.1 Update 18 dated August 12, 2026, and HUD says in the handbook itself that the limit "will be evaluated on an annual basis in conjunction with the process undertaken for the establishment of FHA's Nationwide Forward Mortgage Loan Limits" - so date it whenever you quote it. A consultant is not required on a limited 203(k), though one may be used, and its rehabilitation period may not exceed nine months. Standard 203(k) is for remodeling and repairs at a larger scale, carries a minimum repair cost of $5,000, requires a HUD-approved 203(k) consultant, and its rehabilitation period may not exceed 12 months.

The line between them is defined rather than discretionary, which is useful because it tells you in advance which one a given house will force you into. FHA considers a repair major - and therefore outside a limited 203(k) - if any one of these is true: the repair or improvements are expected to require more than nine months to complete; the rehabilitation activities require more than four draws per contractor; the required repairs arising from the appraisal necessitate a consultant to develop a specification of repairs or work write-up, or require plans or architectural exhibits; or the repair prevents the borrower from occupying the property for more than a total of 30 days during the rehabilitation period. The four-draw test is recent: Mortgagee Letter 2026-06, dated June 23, 2026 and effective immediately, raised the maximum to four draws per contractor and replaced an older two-payment test, so anything written about limited 203(k) draws before mid-2026 states the rule wrongly.

What a standard 203(k) can actually pay for is broader than people assume: structural alterations such as the repair or replacement of structural damage, additions to the structure, and finished attics or basements; rehabilitating, improving or constructing a garage; adding or renovating an accessory dwelling unit; reconstructing a structure that has been or will be demolished, provided the complete existing foundation system is not affected and will still be used; and - relevant here - repairing, reconstructing or elevating an existing foundation where the structure will not be demolished. It also covers "eliminating health and safety hazards that would violate HUD's Minimum Property Requirements," which is the direct answer to a house that failed the appraisal on condition.

What it cannot pay for is worth knowing before you plan the work. No luxury items, nothing that does not become a permanent part of the property, and specifically no new swimming pool - although "existing in-ground swimming pools can be repaired." Also out: exterior hot tubs, spas, whirlpool baths and saunas; barbecue pits and outdoor fireplaces or hearths; bath houses; tennis courts; and improvements that solely benefit commercial functions within the property.

One practical tool almost nobody mentions. Before committing to a wreck, a 203(k) consultant can produce a feasibility study to determine whether a 203(k) mortgage is feasible, and HUD caps what the consultant may charge for one at $375. That cap sits in HUD's 203(k) consultant fee schedule, which carries a November 4, 2024 date from Mortgagee Letter 2024-13, and I confirmed on October 5, 2026 that $375 is still the figure in Handbook 4000.1 Update 18. Draw inspection fees are capped separately, at $375 per draw request. And a note in the same spirit as the appraisal warning earlier: HUD requires the consultant's written agreement with the buyer to disclose that any inspection performed by the consultant is not a home inspection. Still hire your own inspector.

Where the work means the house cannot be occupied for a period, the handbook notes that 203(k) products may have different requirements for the length of time to occupy the property - ask your lender how that works, because the dollar side of all of this is theirs rather than mine. What I can tell you is which of these two mechanisms a given house is likely to need and roughly what the scope looks like, which is usually what decides whether an offer is worth making at all.

Writing an FHA offer a seller will take seriously

Some sellers would rather have a conventional offer, and you will hear that stated as though it were a law of nature. It is a preference built mostly on bad information, and the useful response is not to argue with it but to remove the things the seller is actually afraid of, one at a time. I am not going to quote you a statistic on how many sellers prefer conventional offers: the numbers in circulation come from a 2021 survey taken in the most extreme seller's market in modern memory, and I have found nothing current and reliable to replace them.

The fear is almost always about condition, and the honest answer is that condition matters on a conventional loan too. Fannie Mae's selling guide defines its worst condition rating as improvements that "have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety, soundness, or structural integrity of the improvements," and such a property is not eligible for sale to Fannie Mae until those deficiencies are repaired - the property gets appraised subject to completion of the specific repairs, exactly as FHA does it. So the real difference is not whether condition matters. It is that FHA enumerates specific items - the roof's two years, pre-1978 defective paint, the water heater's relief valve, 50 degrees of heat - where conventional underwriting works from a general condition standard. That is a much narrower difference than the folklore suggests, and it is a conversation worth having with the listing agent in week one.

The other thing sellers say is that a low FHA appraisal will stick to the house for six months and poison the next buyer. As usually stated, that is wrong. "The Mortgagee must order a new appraisal for each case number assignment and may not reuse an appraisal that was performed under another active or endorsed case number, even if the prior appraisal is not yet more than 180 Days old." The next FHA buyer's lender has to order a fresh appraisal. There is a real mechanism underneath the folklore - where an FHA case number was previously canceled and never endorsed, a lender may use the appraisal performed under it - so the accurate version is narrower and much less frightening than the version sellers have heard. For your own planning: the initial appraisal validity period is 180 days from the effective date of the report, and where it is updated, the updated appraisal is valid for one year after the effective date of the initial report.

Tell the seller about the amendatory clause in week one rather than letting it arrive at signing. If you do not receive form HUD-92800.5B, Conditional Commitment Direct Endorsement Statement of Appraised Value, before signing the sales contract, the contract must be amended before closing to say that you are not obligated to complete the purchase, or to incur any penalty by forfeiture of earnest money deposits, unless you have been given a written statement setting forth an appraised value of not less than a stated figure - while you keep "the privilege and option of proceeding with consummation of the contract without regard to the amount of the appraised valuation." The actual dollar amount of the sales price goes in the blank, and an increase to the sale price requires a revised clause. It is not required on a HUD REO sale, on a 203(k), or where the seller is Fannie Mae, Freddie Mac, the VA, USDA Rural Housing Services, another federal, state or local government agency, a mortgagee disposing of REO assets, or a seller at a foreclosure sale. A seller who hears about it early treats it as paperwork. A seller who meets it in week five treats it as a trap.

Check the seller's acquisition date before writing on a flip, because there are plenty of them here. "A Property that is being resold 90 Days or fewer following the seller's date of acquisition is not eligible for an FHA-insured Mortgage." That is absolute, and the acquisition date is in the county record. Between 91 and 180 days after the seller's acquisition, if the resale price is 100 percent or more above what the seller paid, the lender must obtain a second appraisal from a different appraiser, that cost cannot be charged to you, and if the second appraisal supports a value more than 5 percent lower than the first, the lower value must be used. The lender also pulls a 12-month chain of title. There are exceptions - HUD REO resales, sales by other federal agencies, property acquired by inheritance, sales by state and federally chartered financial institutions and the GSEs, sales by state and local government agencies, employer or relocation-agency purchases, and sales in a presidentially declared major disaster area upon HUD notice - and the restrictions do not apply to a builder selling a newly built house.

On what the contract can ask the seller to pay: interested parties, which HUD defines to include the seller, the real estate agents, the builder, the developer and the lender, "may contribute up to 6 percent of the sales price toward the Borrower's origination fees, other closing costs" and prepaid items. Contributions above 6 percent, or above the actual costs, are treated as an inducement to purchase and cannot be applied to your minimum required investment. Worth knowing separately: "payment of real estate agent commissions or fees, typically paid by the seller under local or state law, or local custom, is not considered an Interested Party Contribution." Treat the 6 percent as a drafting ceiling for the contract and leave the arithmetic of what it does to your loan to your lender.

One more clause with a date in it: at least one borrower must occupy the property within 60 days of signing the security instrument and intend to continue occupancy for at least one year. That matters when a seller asks to stay on after closing, so settle possession in the contract rather than at the closing table.

And then the unglamorous part, which is most of the job. Find the roof's permit date before writing. Ask whether a termite treatment has ever been done. Look up for a transmission line. Get the condominium's current status out of HUD's lookup before the second showing. Have the utilities turned on before the appraiser is scheduled. Put in writing to the seller's agent that required repairs are limited to safety, security, soundness and marketability, that cosmetic items are not required, that nothing is replaced for age alone, and that the lender rather than the appraiser decides what has to be fixed. None of that is persuasion. It is removing reasons to say no, and it is why a well-prepared FHA offer competes better than most people expect.

Common questions

Related

• Selling and buying in Homestead
• Roof age is the number that decides your insurance
• Your flood zone is a line item, not a label

Written for buyers of homes in Homestead, Florida City, Redland, Cutler Bay, Palmetto Bay and the Kendall corridor, first-time buyers included. The property requirements, appraisal rules, condominium approval rules and 203(k) figures on this page were verified against the FHA Single Family Housing Policy Handbook 4000.1, Update 18, issued 12 August 2026, and against HUD Mortgagee Letters 2025-23, 2025-18, 2026-06 and 2024-13, on 5 October 2026. The Miami-Dade loan limits were taken from HUD's calendar-year 2026 county loan-limit data file, and the condominium counts were measured on that date using HUD's own approved-condominium lookup. Several of the handbook sections cited - including the property acceptability criteria and the condominium sections - carry a 10 November 2026 implementation date, meaning lenders may apply them now and must apply them from that date, so practice can differ between lenders until then. The well distance requirements described here are subject to a HUD waiver for existing construction dated 27 July 2026 and announced in FHA INFO 2026-17, which is conditional on local jurisdiction distances and documented water testing and which carries its own end date, so confirm it is still in force. HUD has also published proposed revisions to its minimum property requirements - FHA INFO 2026-22, dated 22 September 2026, with a comment deadline of 6 November 2026 - which were a proposal and not policy as at the date above; nothing on this page describes their contents. FHA loan limits and the 203(k) rehabilitation cost cap are reset annually, so re-check any figure here against HUD rather than relying on this page's date stamp. This page deals with the property side of FHA, which is a real estate licensee's work. It is not lending advice, legal advice or tax advice, and it is not an offer or solicitation to originate a mortgage loan: questions about qualifying, credit, debt-to-income, interest rates, borrowing capacity or down payment assistance eligibility must go to a licensed mortgage loan originator, because mortgage origination is licensed activity under the federal SAFE Act and Chapter 494, Florida Statutes. Equal Housing Opportunity.