We are often discussing with FHA buyer's the challenges that come with utilizing the FHA loan product. Although this loan is fantastic and widely used...there are several drawbacks to the loan and as a potential home buyer you should be aware of when buying a home.
FHA’s main deal is that Every Property must be safe, sound, and secure.
ALL UTILITIES MUST BE ON AND OPERATIONAL AT TIME OF APPRAISAL (POWER, WATER, GAS AND SEWER)
Appliances are not required by FHA as long as they are not part of the sales contract
There must be a sink with running water.
Floors do not have to be covered as long as appraiser deems them safe to walk on
Pool water Must Be BLUE
Conditions that require an inspection by qualified individuals or Entities include:
• standing water against the foundation and/or excessively damp basements;
• hazardous materials on the site or within the improvements;
• faulty or defective mechanical systems (electrical, plumbing or heating/cooling);
• evidence of possible structural failure (e.g., settlement or bulging foundation wall, unsupported floor joists, cracked masonry walls or foundation);
• evidence of possible pest infestation;
• leaking or worn-out roofs; or
• any other condition that in the professional judgment of the Appraiser warrants inspection.
• a continuing and sufficient supply of safe and potable water under adequate pressure and of appropriate quality for all household uses;
• sanitary facilities and a safe method of sewage disposal. Every living unit must have at least one bathroom, which must include, at a minimum, a water closet, lavatory, and a bathtub or shower;
• adequate space for healthful and comfortable living conditions;
• heating adequate for healthful and comfortable living conditions;
• domestic hot water; or
• electricity adequate for lighting, cooking and for mechanical equipment used in the living unit.
The Appraiser must examine the electrical system to ensure that there is no visible frayed wiring or exposed wires in the dwelling, including garage and basement areas, and report if the amperage and panel size appears inadequate for the Property. The Appraiser must operate a sample of switches, lighting fixtures, and receptacles inside the house and garage, and on the exterior walls, and report any deficiencies. The Appraiser is not required to insert any tool, probe or testing device inside the electrical panel or to dismantle any electrical device or control.
The Appraiser must notify the Mortgagee of the deficiency of MPR or MPS if the plumbing system does not function to supply water pressure, flow and waste removal.
The Appraiser must flush the toilets and operate a sample of faucets to check water pressure and flow, to determine that the plumbing system is intact, that it does not emit foul odors, that faucets function appropriately, that both cold and hot water run, and that there is no readily observable evidence of leaks or structural damage under fixtures.
The Appraiser must examine the water heater to ensure that it has a temperature and pressure-relief valve with piping to safely divert escaping steam or hot water.
If the Property has a septic system, the Appraiser must examine it for any signs of failure or surface evidence of malfunction. If there are deficiencies, the Appraiser must require repair or further inspection.
If there is evidence of a deficient condition (such as a water-stained ceiling, insufficient ventilation, or smell of mold), the Appraiser must report this condition, and render the appraisal subject to inspection and repairs if necessary.
The Appraiser may complete an as-is appraisal for existing Properties when minor property deficiencies, which generally result from deferred maintenance and normal wear and tear, do not affect the health and safety of the occupants or the security and soundness of the Property. Cosmetic or minor repairs are not required, but the Appraiser must report and consider them in the overall condition when rating and valuing the Property. Cosmetic repairs include missing handrails that do not pose a threat to safety, holes in window screens, cracked window glass, defective interior paint surfaces in housing constructed after 1978, minor plumbing leaks that do not cause damage (such as a dripping faucet), and other inoperable or damaged components that in the Appraiser’s professional judgment do not pose a health and safety issue to the occupants of the house.
If an element is functioning well but has not reached the end of its useful life, the Appraiser should not recommend replacement because of age.
I hope the above helps with some of your particular questions when purchasing a home with FHA financing. If you have any questions - please contact the Ryan Jennings Group with Keller Williams Realty Wellington.
Start searching for FHA qualified homes at www.WestPalmHomeSearch.com
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