Uninsurable Property


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.

  1. FHA 203(k) Loan

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  2. Federal Home Loan Bank Act

    An act passed by the Hoover administration in 1932 that was designed ...
  3. U.S. Department of Housing and ...

    A U.S. government agency created in 1965 to support community ...
  4. Federal Home Loan Bank System - ...

    An organization created by the Federal Home Loan Bank Act of ...
  5. FHA Loan

    A mortgage issued by federally qualified lenders and insured ...
  6. Encumbrance

    A claim against a property by a party that is not the owner. ...
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  1. Can FHA loans be used for investment property?

    Federal Housing Administration (FHA) loans were created to promote homeownership. These loans have lower down payment requirements ... Read Full Answer >>
  2. Do FHA loans have private mortgage insurance (PMI)?

    he When you make a down payment from 3 to 20% of the value of your home and take out a Federal Housing Administration (FHA) ... Read Full Answer >>
  3. Does renters insurance cover water damage?

    An all-perils renters insurance policy does cover water damage, less the deductible, to personal property if the damage is ... Read Full Answer >>
  4. How many FHA loans can I have?

    Generally, the Federal Housing Administration (FHA) does not insure more than one mortgage per borrower. This is to prevent ... Read Full Answer >>
  5. Does renters insurance cover storage units?

    An all-perils renters insurance policy provides coverage for the contents of storage units. Most policies limit the amount ... Read Full Answer >>
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