Though some realtors might tell you that the Federal Housing Administration doesn’t even need an inspection of the house you wish to buy, this is not exactly true. If you would like to get a house and receive an FHA loan, the house and construction must meet certain appraisal criteria determined by the FHA. However, an FHA appraisal is vastly different than a conventional house inspection, and shouldn’t substitute a typical home inspection–particularly as it is not as thorough.
Inspection Procedure
The FHA requires that an expert appraiser or inspector use an FHA checklist during the inspection process of the house you plan to purchase. The checklist can help to ensure the house you buy is safe for the occupants and sound for underwriting functions. An FHA loan approval is determined by the house passing this inspection.
FHA Criteria
An FHA appraisal estimates the value of the house, ensures that it meets minimum property standards and determines that the residence will be marketable. An FHA inspector looks for 12 requirements of home and their house. Minor wear-and-tear or cosmetic problems, including missing handrails, worn or cracked countertops, broken windows and damaged plaster, don’t need to be mended to pass an FHA inspection. But well contamination, structural damage that poses a hazard or active termite infestation has to be mended before the FHA will undersign your mortgage.
Property Deficiencies
The FHA inspector walks around the house searching for site hazards, soil contamination, and drainage and grading problems that can generate standing water or flooding of the house. The inspector takes images from angles that clearly portray the grade of the property and its drainage. An FHA inspector assesses the septic and well for deficiencies to make sure both work well and that no contaminants are present.
Termites
If the house shows active evidence of wood-destroying insects, like termites, the FHA requires a broader inspection, “mandated by local or state authority and if termite activity is customary/prevalent” in this region, according to the national Department of Housing and Urban Development. A extensive termite inspection ensures that the house is structurally sound. Active infestation has to be treated in front of a house meets the standards on the FHA checklist.
Interior and Exterior
The inspector ensures that mechanical systems in the house that contribute to its value–like an HVAC system and appliances–are in good working order. The FHA also requires that the construction of the house, the roof and the foundation are free of major deficiencies, for example poisonous foundation settlement.
Painted Surfaces
The inspector looks for deteriorated paint. However, chipping paint or “defective paint surfaces” on houses built after 1978 don’t need to be mended unless the harm leaves the surface exposed, according to HUD. Defective paint on houses built prior to 1978 needs repair because of the safety risk associated with direct, which has been used in paint before it was banned in 1978.