DEFINITION of 'Uninsurable Property'

A home that is not eligible for insurance through the United States' Federal Housing Administration (FHA) because it is in need of extensive repairs. An uninsurable property is typically ineligible for a mortgage through the FHA; however, in certain cases, the individual purchasing the home may qualify for alternative FHA financing options.

BREAKING DOWN 'Uninsurable Property'

United States Department of Housing and Urban Development (HUD) homes must be appraised and inspected before they can be listed for bidding. The homes typically fall into one of three categories: insurable, insurable with repair escrow or uninsurable. Any HUD home that is uninsurable will generally have to secure other-than-FHA financing. In certain instances, however, HUD will provide financing for the purchase of an uninsurable property through its FHA 203k loan financing program. These are rehab mortgages where the lender rolls the repairs costs into the mortgage. These homes usually sell at a large discount, and are not offered through conventional financing because of their condition.

RELATED TERMS
  1. FHA Loan

    A mortgage issued by federally qualified lenders and insured ...
  2. Federal Housing Administration ...

    A United States government agency that provides mortgage insurance ...
  3. FHA 203(k) Loan

    A type of federally insured mortgage product for individuals ...
  4. Up-Front Mortgage Insurance - UFMI

    An insurance premium that is collected, typically on Federal ...
  5. FHA Streamline Refinance

    A mortgage-refinancing option offered by the Federal Housing ...
  6. National Housing Act

    Federal legislation passed in 1934 to create the Federal Housing ...
Related Articles
  1. Investing

    7 Things To Know About FHA Home Loans

    Federally qualified lenders issue FHA loans, and the Federal Housing Administration insures them.
  2. Investing

    Before You Choose An FHA Mortgage: 7 Key Points

    FHA mortgages offer flexibility and low down payments, though they're often pricier than traditional loans backed by private mortgage insurance.
  3. Retirement

    Understanding FHA Home Loans

    Don't be overwhelmed when filling out these forms. Find out what you need to do here.
  4. Personal Finance

    An Introduction to the FHA 203(k) Loan

    If you're looking at a fixer-upper, the Federal Housing Administration rehab loan may be the mortgage for you.
  5. Personal Finance

    HUD vs. FHA Loans: What’s the Difference?

    Sometimes these terms are used interchangeably to refer to "government loans" for would-be home buyers. But here's the distinction.
  6. Investing

    The FHA's Minimum Property Standards

    If you're thinking about purchasing a home with an FHA loan, here are some standards that must be met for the deal to go through.
  7. Investing

    FHA Money Trouble Causes Concern For Homebuyers

    The FHA says it's operating in the black, but reports say otherwise. If it goes bankrupt, what will the repercussions be?
  8. Personal Finance

    Mortgage for a Manufactured Home? Try the FHA

    FHA loans are often a good alternative for those who have trouble obtaining a conventional mortgage, although you do have to pay an insurance premium.
  9. Personal Finance

    Why Choose an FHA Jumbo Mortgage Over Other Jumbos?

    Housing prices are through the roof in the locale where you’d like to live. How will you afford to buy? One of these home loans may be the answer.
  10. Investing

    Is An FHA Mortgage Still A Bargain?

    Borrowers initially flocked to FHA loans due to their low down payments and accessibility for people with low credit scores.
RELATED FAQS
  1. Can FHA loans be used for investment property?

    Learn the unique situations in which a home buyer can take advantage of the FHA home loan program to finance an investment ... Read Answer >>
  2. Does an FHA loan require a down payment?

    Learn about Federal Housing Administration (FHA) loans, which have down payments as low as 3.5%, low closing costs and lower ... Read Answer >>
  3. Do FHA loans have closing costs?

    Learn about Federal Housing Administration loans and how financial institutions that issue FHA mortgages charge borrower ... Read Answer >>
  4. Do banks offer FHA loans?

    Learn how banks approved by the U.S. Federal Housing Administration offer FHA loans with lower down payment requirements ... Read Answer >>
  5. Are FHA loans fixed?

    Learn more about Federal Housing Authority (FHA) loan programs, the requirements for qualifying and how such loans can be ... Read Answer >>
  6. What is an FHA streamline loan?

    Refinance your high interest rate mortgage with an FHA streamline; the process is quick and easy and can work for most existing ... Read Answer >>
Trading Center