I get a lot of questions about FHA Inspections, and it's about time I sat down and blogged about it. Here are the most common questions I get asked about standard FHA loans. This information does not apply to FHA 203(k) Loans. Can You Do The FHA Inspection? FHA loans do not require a home inspection, they require an appraisal. The appraiser does this. These are often mistaken for an inspection. Home inspections are still strongly encouraged. How Can I Pass The FHA Inspection? First, see above. FHA appraisals require the appraiser to look for obvious defects with the house, but the appraiser never requires repair of these items - the underwriter does. Trying to figure out exactly what might require repair is a bit of a guessing game, and often has much more to do with the people doing the appraisal and the underwriting than it does the property itself. Nevertheless, here is a partial list of some common defects that get flagged: Do I Need A Home Inspection If I'm Getting An FHA Inspection? Again, see above. FHA appraisals are not home inspections, and it's unfortunate that they get confused as such. The FHA appraisal has nothing to do with a home inspection. Do I Need An FHA Certified Inspector If I'm Getting An FHA Loan? No. The home inspection is completely independent of the FHA loan. Reuben Saltzman, Structure Tech Home Inspections - Email - Minnesota Home Inspector
Anonymous
The answer is get a Home Inspection and you will not have any problems understanding what deficiencies that you have to contend with upon the purchase of one of the largest investments of your life. The defects that a Home Inspector will find will allow you to make a more informed decision on the purchase of your house.
You won't need a appraisal if the house has more repairs than you bargained for . Every house should pass FHA for your own benefit. Why not know the condition of the house before you buy?
A Home Inspection is the condition of the house while the appraisal is the value of the house.
Smart Move Home Inspection LLC Best Reggards Doug
Oct 13, 2009 12:00 PM
#41
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties
Yes you are so right. Have they elinimated the appraiser checking out garage door openers?
Oct 13, 2009 12:13 PM
Max Broock Realtors - Birmingham, MI
MI. Specialist - Oakland County
Great post - it usually is not a problem getting the buyer to understand the difference. What has been difficult is when the FHA "appraiser" notes installing a stove as a condition of loan approval (foreclosure property). Banks in so many cases will not pay for any repairs & that includes installing a stove. The buyer's question was - "why do I have to buy a stove before I close on the house?" My question too!
Oct 13, 2009 12:28 PM
Bristol Restoration, Inc 661-294-1812 - Santa Clarita, CA
When you need it done right and done right now!
Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert - Roanoke, VA
Broker/Owner ABRM, GRI, CDPE
The dings I see the most (outside of peeling paint) is missing hand rails on stairs, crawl space with less than 18" of space, lack of a vapor barrier and porch or steps more than 30 inches off the ground without a railing. Good post!
Oct 13, 2009 03:04 PM
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M
This is good information. Appraisals are very different from home inspections though I believe both are extremely important.
Oct 13, 2009 04:07 PM
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate
I agree with you in the difference.
I understand the difference. But, then why are so many appraisers tagging certain items and then having to come out and reinspect. Yes, appraisers not inspectors.
Drives me batty.
Oct 13, 2009 10:09 PM
Anonymous
Knowledgable inspectors and appraisers play an important factor as well. For example, in the Chicago area where agents are using Redytemp adjustable circulators to protect properties pipes from freezing or even bursting. Those of you who haven't experienced a burst water pipe you can imagine the loss of time and money in getting a flooded property back on the market. Nonetheless, agents often have a friend or family member install one on the property to prevent having to repeatedly remember to open cabinet doors or bear the cost of leaving the heat on all the time. But, when inspectors or appraisers arrived on the property they often assumed there was a problem because the home was so cold or they mistakenly noted a lack of heat tape. It's not a issue anymore since they've since become familiar with seeing homes equipped with this system which can easily be mistaken as a instant water heating device. Once the property closed agents often left the Redytemp as their gift to the new owners.
Oct 14, 2009 06:13 AM
#48
Charles Buell Inspections Inc. - Seattle, WA
Seattle Home Inspector
Reuben, I got a call the other day from a buyer looking for an "FHA Inspector," I told them that there was not such thing and that as a Licensed Washington Home Inspector I was capable and qualified to inspect their home. They moved on to someone that knew what they were talking about:) There is indeed a lot of confusion out there about this, and your post is both accurate and too the point.
Oct 14, 2009 11:12 AM
Structure Tech Home Inspections - Minneapolis, MN
Delivering the Unbiased Truth.
Jesse - thanks for the clarification.
Joe - I'm not sure. Maybe an appraiser reading your comment would know...?
Lani - why should be buyer invest any money in to the house before they own it? Just seems silly to me too.
Kevin - interesting info. Homes here in Minnesota get winterized all the time, but I've never hard of a 'Redytemp'.
Charles - I just got a call about this today, and after doing a little research for this blog, I was able to ask another question when my potential client told me he needed an FHA inspection. "Are you getting a 203K loan through FHA?" When he said no, I told him that was good news, because FHA won't require an inspection. I booked the inspection.
Oct 14, 2009 01:53 PM
Safe@Home Inspections, LLC in SE Washington - Asotin, WA
Caring for People, Educating about Homes
Great post, Reuban!
My complaint is take the FHA guys will walk right past a mojor issue without even pausing. When clients ask whether it'll pass FHA, all I can tell them is that some things may not but that the appraisers are all over the ballpark on what they call.
I had crawlspace on a 120 year old home that I entered one arm at a time and used my hammer to drap myself into because it was so skinny. Told my client about the issues under there so they wouldn't get caught by surprise and also told them that FHA probably wouldn't even look in there. I was right. FHA didn't bat an eyeball.
Oct 20, 2009 04:11 AM
Structure Tech Home Inspections - Minneapolis, MN
Delivering the Unbiased Truth.
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer
Structure Tech Home Inspections - Minneapolis, MN
Delivering the Unbiased Truth.
Renee - that's crazy! Wow, thanks for the reblog, and thanks for letting me know!
Oct 28, 2009 12:06 PM
Structure Tech Home Inspections - Minneapolis, MN
Delivering the Unbiased Truth.
Anonymous
Me too Missy!
This is good information, and as REALTORS we need to be aware of issues that may cause a red flag for our clients/customers. I try to stay on top of these issues.
I currently have a client in the process of buying an older home (FHA). We had our home inspection as I ALWAYS recommend no matter how it is being bought. The buyer was informed of the issue of a 2 wire electrical system and was fine with everything.
Now the appraiser comes in and tests the outlets and reports "no ground". Underwriters are now requiring electrical inspection. I want to scream!!!
May 20, 2010 05:08 AM
#60
Structure Tech Home Inspections - Minneapolis, MN
Delivering the Unbiased Truth.
Tammy - no kidding? That's ridiculous. I've heard a lot of horror stories with underwriters.
May 20, 2010 07:32 AM
Anonymous
tenant in a building that is going to be bought via fha loan question what rights do i have when the inspector comes ? porches coming apart structual damage electrical and plumbing problems, potential new owner is claiming he will repair it old landlord just wants to get out. this is a young
kid and dont want to see him get taken. can i say anything or file some sort of complaint?
Aug 11, 2010 01:37 PM
#62
Structure Tech Home Inspections - Minneapolis, MN
Delivering the Unbiased Truth.
Bob - I'm having a hard time following your question. Let me know if I have this right - you are a tenant in the building, and the potential new owner is a young kid, correct?
Your main concern is that the building has a lot of problems that the current owner hasn't dealt with, and that the new owner won't have the means to make these repairs either.
If your city has a rental inspections department, you could take up these concerns with the rental inspections department. If there is no such thing, you could bring up your concerns to the building inspections department. That doesn't mean anything will get done, but it's a start.
Aug 11, 2010 11:01 PM
Rainmaker
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Reuben Saltzman
Delivering the Unbiased Truth.
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