Can You Use an FHA Loan on a Portland, ME Home?

Picture a three unit house with a deep front porch and a hundred years of paint on the trim. That's a very Portland kind of listing. It's also exactly the kind of home where an FHA buyer has to think about the house as much as their own file.

My Maine FHA loan page covers who the program fits. This post covers the property side in Portland: condition, older paint, condos, multi unit buildings, and the county loan limit.

Why does the house have to qualify too?

FHA insures the loan, so HUD sets standards for the home as well as the borrower. The appraiser checks that the property is safe, sound, and secure, which HUD calls its Minimum Property Requirements. When something falls short, the appraiser lists the repairs and an estimated cost to fix them.

That list matters to you. Repairs usually have to be done, or otherwise resolved, before the loan can close. Knowing that ahead of time lets you negotiate with the seller instead of scrambling at the end.

What happens with an older Portland home?

For homes built before 1978, the appraiser looks for defective paint inside and out. Cracking, scaling, chipping, peeling, or loose paint gets noted and has to be repaired under HUD's lead paint rule. That covers porches, railings, stairs, windows, doors, and outbuildings like a detached garage or shed.

In practice, that often means scraping and repainting before closing. Paint work on older homes has its own federal safety rules, so the person doing it should know lead safe practices. Who pays for the work belongs in your purchase contract.

None of this is a reason to skip an older home. It's a reason to walk through with a sharp eye before you make an offer. Flaking trim on the porch or a peeling window sash is the kind of thing an FHA appraiser will write down.

The roof gets its own check. HUD expects the covering to keep moisture out and to have at least two years of life left. When snow hides the roof, the appraiser looks at the attic, the underside of the roof, and the ceilings instead.

Should you still get a home inspection?

Yes. HUD's own disclosure form says it plainly: an appraisal is not a home inspection, and FHA doesn't perform one. Your lender has to give you that form at first contact. If you schedule an inspection early, you may be able to make your purchase contract contingent on the results.

With an older home, ask the inspector about radon, water quality, and lead paint as well. HUD's form lists those among the extra tests worth asking about, and it passes along the EPA and Surgeon General recommendation that every house be tested for radon.

Can you buy a Portland condo with an FHA loan?

Yes, if the condo qualifies. The unit has to be in an FHA approved condominium project, meet FHA's definition of a site condominium, or get through FHA's single unit approval process. HUD keeps a public lookup where anyone can check a project's approval status.

Approval looks at the whole project, not only your unit, so the association's finances, insurance, and legal setup all play a part. Check a building's status before you fall for a unit. If the project isn't on the list, ask me early whether single unit approval is realistic for that building. It's better to know in the first week than in the last one.

Can you buy a two to four unit building with FHA?

Yes. FHA covers homes with one to four units, as long as you live in one of them as your principal residence. At least one borrower has to move in within 60 days of closing and intend to stay at least a year.

That makes a Portland two or three unit building a real option with FHA. You live in one unit and rent the others. A straight investment purchase, with no one in the family living there, isn't eligible.

How much can you borrow in Cumberland County?

FHA loan limits are set by county, and Portland is in Cumberland County. HUD publishes a separate limit for one, two, three, and four unit properties, and it updates the figures each year. The limit caps the loan amount, not the price. You can buy above it if you bring the difference to closing.

As a mortgage broker, I check the current limit for your property type before you shop, the same as I do for all my clients. Then we can look at where that limit sits next to the listings you're watching.

Which FHA guide should you read next?

This post is about the house. The other three cover the rest of the picture.

• If you're wondering whether you qualify, read what FHA looks for in a Portland borrower
• If you're choosing who handles the loan, read how to find FHA loans near me
• If you want the numbers, read what an FHA loan actually costs

FAQ

Will peeling paint stop an FHA loan in Portland?

It can hold up closing until it's fixed. For homes built before 1978, the appraiser has to note defective paint and require repair, so plan for scraping and repainting before closing.

Can I use an FHA loan for a Portland condo?

Yes, if the project is FHA approved or the unit gets single unit approval. You can check a project's status on HUD's public condominium lookup before you make an offer.

Can I buy a duplex in Portland with FHA?

Yes. FHA covers one to four unit homes if you live in one unit as your principal residence. At least one borrower has to move in within 60 days of closing.

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Looking at a Portland home with FHA in mind? Call or text me at (207) 615-7770 and I'll tell you plainly how the house and your file line up.

Started in 2004 and I'm still here.