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. FHA 203(k) Loan

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

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

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

    Federal legislation passed in 1934 to create the Federal Housing ...
  6. Home Equity Conversion Mortgage ...

    A type of Federal Housing Administration (FHA) insured reverse ...
Related Articles
  1. 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.
  2. 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.
  3. 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.
  4. 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?
  5. Personal Finance

    Insuring Federal Housing Authority Mortgages

    This insurance has an edge over private mortgage insurance. Find out why.
  6. 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.
  7. Managing Wealth

    Finding And Investing In FHA Condos

    Interested in a buying an FHA-approved condo? Read this first.
  8. Personal Finance

    Trump Rescinds FHA Cuts for Mortgage Insurance Premiums

    In one of his first executive orders, President Trump suspended the new cuts in mortgage insurance premiums on FHA loans.
  9. Personal Finance

    Guidelines for FHA Reverse Mortgages

    FHA guidelines protect borrowers from major mistakes, prevent lenders from taking advantage of borrowers and encourage lenders to offer reverse mortgages.
  10. Personal Finance

    Getting a Mortgage While Being a Student

    Imagine leaving dorm life to live in your own home while you're in college. It's possible if you know how to get a mortgage and you can cover the costs.
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. Do FHA loans have closing costs?

    Learn about Federal Housing Administration loans and how financial institutions that issue FHA mortgages charge borrower ... Read Answer >>
  3. 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 >>
  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. 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 >>
  6. How many FHA loans can I have?

    Discover how many FHA-insured loans an individual may have, and learn about some of the exceptions, such as relocation and ... Read Answer >>
Trading Center