The FHA Home Inspection – A Buyer’s Checklist
If you’re buying a home, the most important decision once you find the home is the financial vehicle or instrument you will use to purchase the home. Of course many buyers are limited to a handful of loans that match their affordability. And the most popular loan is the FHA loan.
A property insured by FHA must be SAFE, SANITARY and STRUCTURALLY SOUND. Otherwise FHA will not insure the property (provide the loan) when suitable conditions are not met per their guidelines.
When applying for a FHA loan, it is contingent upon passing the FHA standards. If the Seller will not bring the property up to standard, the loan is rejected. However, if the Seller makes the required repairs or corrections, it must be reinspected to pass the inspection.
IMPORTANT: This is not a standard home inspection. This is only to satisfy the lender requirements and is never a replacement for a property inspection by a licensed and trained inspector.
An important change was made on January 1, 2006. FHA now only requires repairs for those items that rise above cosmetic defects, minor defects, or normal wear and tear. Therefore, an Appraiser must report ALL of these deficiencies while the lenders (underwriting) can use professional judgment and strict underwriting practices to determine if it threatens the safety structural integrity of the property.
Some of the basic FHA inspection guidelines and issues that arise are the following:
- Cracked or damaged exterior doors
- Cracked or missing window glass
- Chipping or Defective paint surfaces (built after 1978)
- Minor plumbing leaks such as faucets
- Missing handrails **Most common**
- Worn or soiled floor coverings or finished hardwood
- Rotten or worn out counter tops
- Damaged plaster or drywall – walls and ceilings (built after 1978)
- Trip hazards on sidewalks (if owned), stairs or other surfaces including carpeted surfaces or hardwood floors
- Lack of all-weather driveway surface
Some SAFETY items that may require automatic repair:
- Must have adequate egress from bedrooms to exterior of home
- Roofs that are passed their useful life or leak
- Foundational & structural damage due to settlement
- Defective paint surfaces (before 1978)
- Defective exterior paint w/ unprotected surface (built after 1978)
What requires an automatic inspection? These can include:
- Wet basement
- Standing water (against or under the foundation)
- Faulty mechanical system(s): electrical, plumbing, or heating
- Structural failure: settlement (noticeable settling in basement or foundation walls)
- Hazardous materials located on premises
FHA only requires the following IF conditions exist:
- Termite / Wood Destroying insects: only IF evidence of active infestation (lenders discretion)
- Well (individual water system): It’s required IF/when state or local jurisdictions require. It must pass and not be contaminated.
- Septic: Required IF evidence of failure, mandated by local authorities (lenders discretion)
- Flat roof (or unobservable)
This doe not include everything in the FHA Inspection Checklist. Please review that document to gain a greater understanding what’s involved.
Home Buyers: This type of checklist is used during the Appraisal for a FHA loan. It is highly recommended always to get a proper home inspection. Communicate with your inspector as he/she can look for possible FHA items during their inspection.
Sellers: if you’re home *may* have an issue with one of these items above, you should be prepared to address them during the home sale process. It is advised to address them before and to disclose those in advance to be a proactive seller. No one likes surprises.
Here’s another simple FHA Home Inspection Checklist.