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FHA Changes Part III
This may be old news for some people but not everyone is familiar with the changes made by FHA.
FHA Changes Part II          FHA Changes Part I
Excerpts from MORTGAGEE LETTER 2005-ML-48 This Mortgagee Letter is effective for all appraisals performed on or after January 1, 2006.
FHA no longer mandates automatic inspections for the following items and/or conditions in existing properties:
Wood Destroying Insects/Organisms: inspection required only if evidence of active infestation, mandated by the state or local jurisdiction, if customary to area, or at lender's discretion
Well (individual water system): test or inspection required if mandated bystate or local jurisdiction; if there is knowledge that well water may becontaminated; when the water supply relies upon a water purification systemdue to presence of contaminants; or when there is evidence of:    Corrosion of pipes (plumbing)    Areas of intensive agriculture within 1/4 mile    Coal mining or gas drilling operations within 1/4 mile    Dump, junkyard, landfill, factory, gas station, or dry cleaner within 1/4 mile    Unusually objectionable taste, smell or appearance of well water(superseding the guidance in Mortgagee Letter 95-34 that requires wellwater testing in the absence of local or state regulations)
Septic: test or inspection required only if evidence of system failure, ifmandated by state or local jurisdiction, if customary to the area, or ... more

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