I have two houses on my land and everything is paid for. I'm now trying to sell it and had an offer and the buyer's FHA loan was approved. Then their bank found out it was for two houses and they wouldn't follow through.

Does anyone know if there is anything I can do that would make it okay for a lender to approve property with two houses on it?

Separate the two homes. One on each lot. That is what I did here. Now you might have to get the additional lot approved with a varience by you county or city.

Yes, do a new survey and divide the properties.

I live in Washington and I own two homes on one lot. I have the loan through Homecomings financial which is now GMAC. I would try a more knowledgeable lender. My lender had no problem with the loan.

I don't think FHA allows a borrower to own two homes. Say if it was one home and the home was once a duplex, the seller or you would have to turn it into a one family home with one kitchen etc. So maybe that's why FHA wouldn't cover a two house loan. If the seller were to divide the property and houses the buyer still could only be allowed to buy one of the homes —not both. So get another lender, there are a lot of rules to follow when getting a FHA, or FMHA loan. Sometimes when going to another lender you could even get a better deal.