A few things you should know before building your dream home!
Building a Home
If you want to build a new home, there are things you need to know before you begin. Homes and projects financed by FHA-insured mortgages are the collateral for these loans, and their lack of durability can increase the FHA’s financial risk in the event of default.
More specifically, the model codes do not contain any minimum requirements for the durability of items such as doors, windows, gutters and downspouts, painting and wall coverings, kitchen cabinets and carpeting. The MPS includes minimum standards for these, and other items, to ensure that the value of an FHA-insured home is not reduced by the deterioration of these components.
The property report contains relevant information about the subdivision and must be delivered to each purchaser before the signing of the contract or agreement
The property report, which is also prepared by the developer, goes to the buyer. The law requires the seller to give the report to a prospective lot purchaser prior to the time a purchase agreement is signed. Ask for it. The seller is also required to have the buyer sign a receipt acknowledging receipt of the property report.
Do not sign the receipt unless you have actually received the property report.
Check the developer’s property report before buying. This is the kind of information you will find in a property report:
- distances to nearby communities over paved and unpaved roads
- existence of mortgages or liens on the property
- whether contract payments are placed in escrow
- availability and location of recreational facilities
- availability of sewer and water service or septic tanks and wells
- present and proposed utility services and charges
- the number of homes currently occupied
- soil and foundation conditions which could cause problems in construction or in using septic tanks
- the type of title the buyer may receive and when it should be received.
Federal law requires that you receive this report prior to signing a contract or agreement to buy or lease a lot in this subdivision. However, no federal agency has judged the merits or value of the property.
If you received the report prior to signing a contract or agreement, you may cancel your contract or agreement by giving notice to the seller any time before midnight of the seventh day following the signing of the contract or agreement.
If you did not receive this report before you signed a contract or agreement, you may cancel the contract or agreement any time within two years from the date of signing.