FHA News & Info

Here is a list of some of the problem areas most often encountered with an FHA appraisal. This list is not meant to be an all-inclusive list, nor is it any guarantee that a property will be approved by FHA if the listed requirements are met. Any deficiencies noted by the appraiser will make the appraisal report subject to those deficiencies being inspected and/or repaired.

· Peeling Paint – if a home is built before 1978, there is a good chance of lead based paint being used in the property once or more in the lifetime of the home. If there are any areas inside or outside of the home with paint blisters or cracked and peeling paint, the affected areas must be corrected in order for the property to be considered by FHA. Common areas are the exterior siding, around door and window frames, porches with painted floors and/or ceilings, garages and other buildings.

· Mechanical Systems – the utilities must be turned on and functioning for a property to be considered by FHA. The appraiser is required to test the systems during the appraisal process. If any of the utilities are not turned on, the appraiser must come back when they are turned on. This will usually result in additional trip fees and a longer delay. The mechanical systems include the electric, plumbing, and heating systems.

· Attic & Crawl Spaces – access to these areas MUST be available. An appraiser is required to have a “head and shoulders” view of these areas. If a property does not have access to any of these areas, an access area must be made and the appraiser must view the area before FHA will consider the property.

· Defective Construction – any property with visible structural issues will be required to be fixed prior to FHA considering the property.

· Roof – the roof of the property must be in a condition that does not affect the safety and/or livability of the inhabitants or the structure of the home itself. Roofs that appear to be worn out or leaking should be fixed if a home is going to be considered by FHA.

· Foundation – properties with cracked masonry and foundations will require an inspection from a licensed professional prior to be considered by FHA. Most homes have some kinds of cracks due to settling and may not necessarily require repair. However it is the appraiser’s job to note these cracks and require an inspection.

· Location - properties that are located in an area that would endanger the physical improvements or affecting the livability of the property, its marketability, or the health and safety of its occupants will be rejected under FHA guidelines. Highest and best use issues for properties located in an area where the land use is changing away from residential may also be rejected by FHA.

· Soil Contamination – appraisers are to check for readily observable evidence of hazardous substances in the soil. This could include unusual pools of liquid, pits, ponds, lagoons, stressed vegetation, stained soils or pavement, drums or odors. If any of these conditions exist, additional testing and/or inspections will be required.

· Grading & Drainage – the house should have adequate drainage leading away from the foundation and should not have standing water pool up in the yard. This will require a repair before being considered by FHA.

· Infestation – any evidence of activity for termites and other wood destroying bugs will require further testing and inspections before being considered by FHA.