FHA Check List
Overview for Homeowners, Agents, and Lenders
The following information is based on the new manuals and guidelines. All questions regarding the new HUD guidelines and appraisal reforms can be sent online directly to HUD's REAC Customer Service Center at www.hud.gov/reac/sass.html. The guidelines are still being interpreted with little or no notification of changes to appraisers or lenders. If you are aware of any changes please fax us your information and we will look into it.
This document is designed to help individuals considering FHA financing understand some of the items the appraiser will be looking at. It is not a complete list, and is only our consolidation and interpretation of the information available. It does not include every consideration, just the ones we have found are most often of interest. Other appraisers may have varying opinions on what is required and how the information is to be interpreted. If you have any questions on the FHA appraisal process, please feel free to email, fax or call us and we will do our best to answer your questions.
FHA appraisals are not a guarantee that the property is free from defects. The appraisal only establishes the value of the property for mortgage insurance purposes. Buyers need to secure their own home inspections through the services of a qualified inspector and satisfy themselves about the condition of the property.
Overview - information on some of the common questions.
The appraiser must note potential repair and condition items. The lender has the final determination as to how the potential repairs and conditions are satisfied. *NOTE: The lender can also call for additional repair item not listed in the Complete Summary Appraisal Report.
• Appraisers must examine every room, including attic, basement, and garage. Please make sure all areas are accessible for the appraiser, or they will have to return in order to complete the inspection which might result in an additional charge.
• Appraisers must have access to all attics. This means you need to provide access. If it is accessed by a scuttle in a closet, make sure the appraiser has access to the scuttle. Make sure that the scuttle can be opened. Make sure the appraiser can get to the attic - provide a ladder if possible.
• Must be ventilated by vent, fan or window.
• Attic structural support intact and not damaged.
Basement crawl space
• Appraiser must inspect basement crawl spaces. Please make sure access is provided.
• Distance from the bottom of the joists is 18" minimum.
• Must be free of all debris and trash, and must be properly vented.
• Must not be excessively damp and must not have any water ponding.
• If water exists, a vapor barrier must be in place in the crawl space.
• All outlets and lights must work. 60 amps are ok if it is sufficient for the needs of the property.
• No frayed electrical wires.
• Low voltage power lines may not pass over the primary living unit. If you have power lines passing over any other structure on your property, the requirement is more flexible and relates to safety. (A common factor given by most townships is 12' clearance.
Heating and cooling systems
• Heating and cooling systems must be functional.
• All rooms must be heated
• If heated by other than a central heating system, please call for details
On Site Septic and/or Water
• Appraiser must look for any observable evidence of septic system failure.
• If public water and/or sewer are available, property must be hooked up if costs are reasonable. The lender is responsible for determining the feasibility and/or reasonableness of the connection cost (3% or less than the estimated value of the property).
• Wells will require water testing.
• Septics require inspection of observable evidence of system failures.
• The well and septic must be 50 feet apart. *
• Neither can be within 10 feet of the property line. *
• Cisterns are generally not acceptable (unless they are typical for the area).
• Dug wells or wells served by springs or lakes are not acceptable.
• Mechanical chlorinators are not acceptable.
*(If appraiser cannot determine distances, then the underwriter is responsible for securing this information from a qualified party.)
• If house was built before 1978, appraiser must note all the defective paint.
• This applies to all paint on the property, inside and out, and includes fences, clotheslines, outbuildings, etc. It is not limited to the house itself.
• All defective paint surfaces need to be handled in accordance with HUD guideline and repainted.
• Must be adequate flow when several fixtures open at once and toilet flushed.
• Leaks are not ok.
• There must be hot water.
• Water heater must have non-adjustable temperature and pressure relief valve to within 6" to 18" of floor.
• The roof requirements apply to all roofs - house, porch, garage, etc.
• Appraiser must make a determination about whether a roof has a useful life of at least 2 years. If not, repair/replacement may be required.
• For ANY flat roof, there will be a condition for a roofing certification.
• Look for any surface evidence of an Underground Storage Tank.
• Make note at proximity to dumps, landfills, industrial sites or other locations that could contain hazardous materials.
• Termite inspections are required in our area for all structures, except condominium units, which are above the first floor level.
• Broken windows must be replaced.
• Windows must function.
Safety and Soundness Issues (items typically looked at)
-Missing or rotted wood and siding. -Unsafe porches or decks.
-Major foundation cracks. -Unsafe sidewalks.
-Significant repointing/cement dash needed. -Debris needs to be cleaned up.
-All exterior doors must work.
-If pipes are asbestos wrapped, ok unless asbestos is deteriorating.
-No significant wall/ceiling cracks. -No significant visible holes in walls or ceiling.
-Adequate access to basement. -No water damage in basement.
-No rodent infestation. -Handrail required on any stairs with 3 or more risers.
-Occupants of a bedroom must be able to get outside the home if there is a fire.
(If there is no bedroom window, then the bedroom may not qualify as a bedroom.)
-Appraiser must look for adequate drainage from structure.
-Appraiser must verify that the garage door opener has an automatic reverse feature and stops when it meets with resistance.
Other areas of concern
The items listed below are not covered in this document but each has their own list of considerations. If one of these applies, please call for more information.
• Overhead high voltage lines within engineered fall distance.
• Located in an airport clear runway zone.
• High-pressure gas or petroleum lines within 10 feet of your property.
• Within 300' of stationary tanks with over 1000 gallons of flammable or explosive material.
• Manufactured house.
• Private road or shared driveways
• Heated by other than a central heating system.
Overview from the Handbook
Here are some excerpts from the manual that set the flavor of the work we are being asked to do. "Required repairs are limited to those repairs necessary to preserve the continued marketability of the property and to protect the health and safety of the occupants."
"Any operable or useful element that will have reached the end of its useful life within two years should be replaced."
"Required repairs will be limited to necessary requirements to:
- preserve the continued marketability of the property; protect the health and safety of the occupants - protect the security of the property These are typical conditions that require repairs or replacements:
- termite damage; damaged, inoperative or inadequate plumbing, heating or electrical systems; broken or missing fixtures; rotten or worn-out counter tops; any structural failure in framing members; leaking or worn-out roofs; defective paint surfaces; masonry and foundation damage; drainage problems; damaged floor worn through to the finish; broken plaster or sheetrock."
Conditions Not Requiring Repairs
Conditions that do not ordinarily require repair include any surface treatment, beautification or adornment not required for the preservation of the property. These are some examples:
• A wood floor's finish that has worn off to expose the bare wood must be sanded and refinished However, a wood floor that has darkened with age but has an acceptable finish does not nee p polishing or refinishing.
• Peeling interior paint and broken or seriously cracked plaster or sheetrock requires repair and repainting, but paint that is adequate though not fresh does not need to be redone. - Missing shrubbery or dead grass on an existing property does not need to be replaced.
• Cleaning or removing carpets is required only when they are so badly soiled that they affect the livability and/or marketability of the property.
• Installing paved driveways or aprons should not be required if there is an otherwise acceptable surface.
• Installing curbs, gutters, or partial street paving is not required unless assessment for the same is imminent.
• Complete replacement of the tile floors is not necessary if some tiles do not match, etc.