New Rules - FHA Mandatory Property Inspections required for 2012

New Rules - FHA Mandatory Property Inspections required for 2012

Contrary to what most real estate agents, buyers and sellers believe, FHA only has a few mandatory inspections  that they require when completing an appraisal. FHA appraisers are REQUIRED to ask for an inspection if they observe problems due to health, safety or value of the property. 

For example, a termite inspection is not mandatory unless the appraiser observes that there is current insect activity.

FHA does have very few MANDATORY inspection reports.  However, if during the appraisal inspection, the appraiser determines that there might be safety or health issues, they are obligated to require an inspection.  If they feel that a structural issue may affect the value of the property (i.e., roof) they may also require inspections.  

 

FHA appraisers ARE required to note any inspections for new or existing homes that are REQUIRED by state or local government and comment on the appraisal report.

 

Here are some of the more common reasons an FHA appraiser would require an inspection repairs, inspections or certifications. 

 

Termite Inspection:  Only if evidence of current infestation required by lender or customary for the area.  One is not required if there is evidence of previous infestation or repairs have been made due to wood-destroying insects.

 

Well & Septic:  If the appraiser notes that the distance between the water supply and the septic system could be a potential for contamination, he may ask for an inspection.  It’s up to the lender to determine if the well and septic meets local and state requirements and may ask for the local health department certification or inspection. 

 

Water Test:  Only if the local health authority or lender requires a water test when a new home is built or an existing home is sold, will FHA requires that it meet EPA’s minimum standards.

 

Handrails & Trip Hazards:  Not automatic.  Appraiser needs to comment if they feel that there is a safety risk.  However the lender makes the final determination if handrails or sidewalk repairs are needed.

 

Underground Tanks:  Only required if the appraiser sees any surface evidence of leakage or on-site contamination.

 

Manufactured Homes:  An engineer’s certification that the foundation complies with HUD criteria is required for all manufactured homes. 

 

Lead-Based Paint Repairs:  If the home was built prior to 1978 and the appraiser notes peeling or chipping paint, correction of defective paint surfaces is required.  If repairs are done by a landlord, property owner or contractor, they must be “certified” and have taken training classes in order to repair lead-based paint surfaces. 

 

Inspections:  The final inspection of any repairs required by the appraiser must be inspected by the appraiser.   The final inspection of any repairs required by an inspection report may be completed by anyone the lender selects.   For new construction, the final inspection must be done by the appraiser and the appraiser must state that the new home complies with local building codes. 

Hope this helps out in Arizona 92.3% YTD of all transactions occur within the FHA  Pricepoint.  Thanks as always fo rstopping by an dreadinga nd commenting on my blog: New Rules - FHA Mandatory Property Inspections required for 2012

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