New FHA Home Inspection Guidelines for Buyers & Sellers

By
Real Estate Broker/Owner with Vision Real Estate

With the FHA loans now almost 90% of all loans due to the recent mortgage crisis, I thought I would share what they are looking for in their required Home Inspection. If you are selling or considering selling you will want to make sure the home can meet these requirements. Otherwise... you may be eliminating a large portion of the Buyers in the market.

FHA INSPECTION REQUIREMENTS: ELECTRICAL A single main shut-off breaker is required. If more than one breaker must be tripped to disconnect the power, a new service panel is required. The main service must be at least 100 amp. If it is less, a new service is required.

NOTE: These electrical requirements eliminate most pre-1960 homes that have not had an electrical upgrade. If FHA is the only financing option, then a 203K program should be considered to finance the improvement.

HEATING The heating and cooling system must have at least 2 years of remaining life. Wood stoves or solar heating are not acceptable as the sole heat source. NOTE: Coal or wood stoves with automatic stokers are acceptable.

NOTE: These heating requirements may eliminate most pre-1960 homes that have not had a heating system upgrade. If FHA is the only financing option, then a 203K program should be considered to finance the improvement.

HOT WATER HEATER MUST have an installed Safety Release Valve (SRV). The SRV must have a discharge line that drains to the outside of the home. It cannot be reduced in size from the valve outlet. In the case of a basement installation with a drain the discharge line must exhaust 6" to 24" from the floor.

NOTE: The Safety Release Valve upgrade is usually under $20 for the valve plus installation.

LEAD-BASED PAINT All properties built prior to 1978 should be considered as target housing for lead-based paint hazards. Defective peeling/flaking paint on any interior or exterior surface must be identified and repaired following the EPA guidelines.

SEPTIC SYSTEMS Homes with septic systems are acceptable. Evidence of septic tank pumping within the last 5 years is required. WINDOWS FOR SLEEPING ROOMS Escape or rescue windows shall have a minimum net clear openable area of 5.7 square feet. The minimum net clear openable height is 24" and width is 20". The maximum escape window sill height is 44".

NOTE: These window egress requirements may eliminate most pre-1960 homes that have not had a window upgrade. Small basement windows can be enlarged and upgraded. It has been my experience that most FHA Appraisers overlook this requirement unless the windows are inoperable or are set into an underground basement with 60" plus sill height.

If FHA is the only financing option, then a 203K program should be considered to finance the improvement.

Comments (2)

James K Barath, CMPS
Canopy Mortgage, LLC - Crown Point, IN
FICO Pro, Certified Military Housing Specialist

You make a great point about leveraging the FHA 203(k) Rehabilitation Mortgage Insurance Program for some of the repairs that would make a home ineligible for not only FHA, but for any conventional loan as well.

Dec 06, 2009 03:24 PM
Jaret Ghent
Vision Real Estate - Roseville, CA
Expert Real Estate Advice

We love the 203k Program, unfortunately not many know about the Program or understand it...

Thanks for stopping by James!

Dec 07, 2009 03:58 PM