FHA Repair Requirements

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

The latest FHA Repair Requirements have been around since early 2006, but I still frequently get a number of questions on what is presently required by FHA.  So I figured that it was about time to post a blog on what are the mostly things that will be identified by Appraiser as required FHA Repairs on a appraisal.

FHA Repair Requirements that are regularly identify as required repairs on FHA Appraisals are generally related to property conditions that MAY represent a risk to the health and safety of the occupants or soundness of the property such as:

  • Inadequate access/egress from bedrooms to exterior of home
  •  Defective paint surfaces in homes constructed before 1978
  • Roofs that the Appraiser identifies as possible having less than two years left on them
  • Leaking or worn out roofs (if 3 or more layers of shingles on leaking or worn out roof, all existing shingles must be removed before re-roofing)
  • Evidence of structural problems (such as damage caused by excessive settlement)
  • Leaky or missing pipes
  • Wood Rot
  • Exposed Wires/Electrical
  • Open Electrical Box
  • Working Mechanicals (heat, water, etc)
  • Hand Dug Well (will grant exception)
  • Wells Within 10’- 0” of House (will grant exception)
  • Wells Within 75’- 0” of Septic System (will grant exception)

Examples of MINOR property conditions that are no longer AUTOMATIC FHA Repair Requirements:

  • Missing handrails
  • Cracked or damaged exit doors
  • Cracked window glass
  • Minor plumbing leaks (such as leaky faucets)
  • Defective floor finish or covering (badly soiled carpeting)
  • Rotten or worn out counter tops
  • Crawl Space with debris or trash
  • Defective paint surfaces in homes constructed after 1978.

Examples of tests that may no longer be REQUIRED:

  • Wood Destroying Infestation Report-required ONLY if the Appraiser observers possible evidence of ACTIVE infestation
  • Well (Individual Water Test) - is not required unless there is knowledge that well water may be near a sources of contamination
  • Septic Test- is not required unless there is evidence of system failure.

I hope that helps to clarify what FHA Repair Requirements may or may not be required on a FHA Appraisal today.


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Who To Call For Your Mortgage Needs In Connecticut:

George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308  gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who is licensed in #CT, #RI, #MA, #NH, & #FL and can assist you with all your #FHA, #Conventional, #VA, #USDA, and #State Bonded Progam #mortgage needs in #CT, #RI, #MA, #NH, & #FL. George resides in Middlesex County which includes #Middletown, #Old Saybrook, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or souto@snet.net

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Topic:
Mortgage / Finance
Location:
Connecticut
Groups:
Realtors®
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Real Estate Rookie
The FHA Mortgage Group
Tags:
fha appraisals

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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

An excellent post, George. Some of these things are, sadly, kinda common in many of the older homes, especially short sales and REOs. Definitely worth sharing with buyers who are FHA qualified or considering that particular loan.

Jeff

Jul 16, 2012 02:02 PM #5
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Michelle Carr Crowe,Altas Just Call...408-252-8900!
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Thank you so much for sharing that list. It's one I'm going to keep handy for my FHA buyers.
Jul 16, 2012 04:46 PM #6
Rainer
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Pat Mistretta
PalmerHouse Properties & Associates - Atlanta, GA
Atlanta Lofts and City Living

George - This is a great list on FHA repair requirements.  It is definitely worth sharing with buyers who are planning on getting a FHA loan.  It is also very informative for sellers who have not thought about the possibility of a buyer getting a FHA loan.  I have bookmarked this!  Thanks for sharing.

Jul 16, 2012 07:24 PM #7
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Thanks for the list. It's good to know. Some lenders, such as one big bank I won't name, still needs a clear wood destroying pest report even if it's not on the contract. Many direct lenders do not, unless like you say, the appraiser notices infestation.

Jul 16, 2012 07:30 PM #8
Rainmaker
288,809
Jay Beckingham
Bank of England Mortgage - Delray Beach, FL
Seniors ROCK!

some of the requirements seem to, or may have, regional influences such as,

"what's a basement?" if we had one down here you can bet there'd be water in it.

we're probably more sensitive to termite, bug issues, for obvious reasons, and wood dry rot.

 

Jul 16, 2012 08:17 PM #9
Rainmaker
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Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

George, all i can say is that the last 3 tests are so important to buyers....I can't believe they are not requiring it!  An the well being closer than 100' from a well, please...i would be upset if I bought a house like this...it seems this is going to the other extreme...thanks for sharing!

Jul 16, 2012 08:39 PM #10
Rainmaker
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Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for the list. I will bookmark it and share with buyers and sellers.

Jul 16, 2012 08:56 PM #11
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Jeff, you are right, some of the biggest repair issues that I have run into are on REO properties.

Michelle, I hope the list comes in handy for you.

Pat since I deal with Buyers I did not think about the Sellers, but you are right this information is useful to them as well.

Pamela, I could maybe see that in areas of the country that have major insect issues, but to make everyone do it is just creating extra costs, though VA still requires pest inspections no matter what.

Jay, living in New England we just take it for granted that houses have basements, so I was very surprise when I travel to other parts of the country, that basements are not the norm.  But like you said some of the things on the list are more specific to different parts of the country.

Ginny here in Connecticut we have many older properties that Wells & Septics are around the 50' distant, and I and it is unusual to see Wells & Septics more that 100' apart  here.  FHA has had these distance requirements for a while now, which is something that other loan programs do not have.  For example Conventional Loans do not have any Well & Septic distant requirements so the Well and Septic could be on top of one another.  I agree with you, I would want the Well & Septic to be as far apart as possible, I don't want to be drinking yellow water.  But you would be surprised how many people don't seem to care.

Gata, glad you found it worthy to be bookmarked.

Jul 16, 2012 09:18 PM #12
Rainmaker
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Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Geroge this is a great refresher. I know that there are many Realtors that have no idea what the rules are for FHA!

Jul 16, 2012 09:30 PM #13
Rainmaker
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Lisa Von Domek
Lisa Von Domek Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Hello George,

Great post, excellent detail and reasons why the FHA inspection is not to take the place of a home inspection  (as some buyers may think).

Jul 16, 2012 11:08 PM #14
Rainmaker
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Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

The FHA appraisal requirements have been a moving target for a long time. The appraisal certainly does not take the place of a home ispection, which should always be don't when someone is buying a home.

Jul 16, 2012 11:36 PM #15
Rainmaker
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Carol Faaland-Kronmaier
Weichert, Realtors; Hillsborough - Hillsborough, NJ
PhD, e-PRO, Manville, Hillsborough, Somerset NJ

George, Thank you for the updates on the latest FHA repair requirements.  Thai is a very interesting and helpful reminder post! I

Jul 17, 2012 12:49 AM #16
Rainer
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Christy Walker
Christy Walker & Associates - Cornelius, NC
Christy Walker & Associates

Great refresher! We always could use a reminder and especially the new agents need to keep this list on hand!

Lisa Smith, Buyer Specialist

Jul 17, 2012 01:06 AM #17
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Brenda Mullen
RE/MAX Access - Schertz, TX
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Great list on what FHA requires on appraisals.  I am surprised to hear about what may no longer be a requirement.  Is this already in place, or just a proposal?  Thanks!

Jul 17, 2012 01:48 AM #18
Rainmaker
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Nick T Pappas
Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Hun... - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

George, I don't know if I misunderstood you, but are those items under; "Examples of test that may no longer be required", now not required with those conditions?  I must be reading or understanding that wrong...that doesn't make sense to me...those are pretty important issues.

Jul 17, 2012 03:03 AM #19
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Bill that is why it is my job to keep on reminding Realtors of the guidelines :)

Lisa & Joe you are correct.  Even though the FHA appraisal takes more into consideration than a Conventional appraisal, it is in NO way near what a Home Inspector does, and in my opinion a Home Inspection should always be done.

Carol these guidelines have been in place for a few years now, but I find that it is helpful to remind everyone of them periodically.

Christy, you explained very well my my reason for posting them.

Brenda, this has been in place for at least the last five years.

Nick I went back and tried to clarify especially the language on the Wood Boring Insects.  These inspections use to be automatic prior to the last change to the guidelines, but now only needed if a need for them is pointed out by the Appraiser.  Having said that, I think that a Buyer should have them done regardless if the Appraiser indicates a need for them or not.  All of them are money well spent.  That is my opinion and we both know that my opinion and a couple of dollars may get you a cup of coffee, unless you go to Starbucks which it may only get you a half a cup :)

Jul 17, 2012 04:02 AM #20
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Please read the corrections made under "Examples of tests that may no longer be REQUIRED" I apologies for not having noticed the incorrect wording earlier.

Jul 17, 2012 01:07 PM #21
Rainmaker
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Bruce Hicks
Best Homes Hawaii - Honolulu, HI
Your Lifetime Friend/Helper!

george, I missed this posting the first time around.  It reminded me to tell my purchasing client about houses that need repairs and remodeling.

Jul 17, 2012 02:21 PM #22
Rainer
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Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

George -- the soiled carpets are one thing -- if the carpets have holes in them, or are coming loose from the tack strip that is something else entirely.

Jul 18, 2012 02:45 AM #23
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Bruce, there is a lot that goes into the purchase of a house these day and the level of repairs is certainly one of them.

Steve, I agree.  There is a big difference between cosmetic and health and safety.

Jul 18, 2012 09:31 AM #24
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