What does “FHA Financing Insurability” mean?

An independent FHA-approved appraisal and inspection are usually completed within two weeks of HUD acquiring the property and the condition will be noted on the listing. These listing condition codes not only describe the condition of the property to a degree but also determine what type of FHA loan may be used by the new purchaser. If the property is “insurable (IN)”, then there’s no obvious repairs needed to qualify for an FHA insured loan and FHA 203(b) financing may be used. If the property is “insured with escrow (IE)”, then for FHA 203(b) financing to be used, certain repairs must be made and an escrow account is established to make sure they are made. The needed repairs will be listed with the property and the cost will be repaid by the borrower. If the property is designated as “uninsurable/uninsured (UI)”, then the property requires extensive repair and cannot be financing with FHA 203(b) financing. If cash or conventional financing is used, then none of this is relevant. Be aware that this gives you an idea of problems that have been found but it’s still recommended that you get your own inspection.