As the popularity of FHA mortgages continues to rise, borrowers are becoming more informed about the various options available for the required down payment. One of these options that many are already implementing is using sweat equity for FHA mortgage down payments. In other words, sweat equity is work that is performed by the borrower and is often used with homes that are in need of repair, such as foreclosures, or for new homes under construction. FHA guidelines for using sweat equity for down payments are specifically outlined and must be understood. For existing construction, the appraisal is to be done prior to the sweat equity and must list the repairs and/or improvements that are eligible.

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