FHA Inspection

  1. Location: The appraiser’s first consideration is the location of the subject property. FHA will reject any property that has an environmental contaminant, noxious odors, offensive sights or excessive noise. They would have to endanger the physical improvements or the livability, marketability or health and safety of the occupants.

  1. Site: The subject site will be inspected for any soil contamination. Some of the warning signs are pools of liquid, pits, ponds, lagoons, stressed vegetations, stained soil or pavement, drums and odors. If any of these conditions exist, further testing would be required. Appraiser will observe the grading and drainage of the property. If any standing water exists repairs will have to be made. A basic inspection of private sewers and wells will be done and any deficiencies will be noted. All roads must have vehicular and pedestrian access. FHA defines all weather roads as any road where an emergency vehicle can pass in any weather.

  1. Exterior of Home: The appraiser will inspect all sides of the subject and comment on any physical deficiencies or adverse conditions. Some of these would be dry rot, cracks, dampness and missing exterior material. Comments will be made and photo will be included of the deficiencies or adverse conditions. The appraiser will look under the home for any standing water or damage to the foundation system. A general photo will be taken of all four sides of home.

  1. Interior of Home: The electrical and plumbing system will be inspected and tested. The appraiser will look for any lose frayed or exposed wires. There will be a test of lights, appliances and receptacles. There will be an inspection of the hot water heater. Appraiser is looking for rust, leeks, odors, connections, and if it is properly tied down. The faucets will be tested for hot and cold water. There will be a test of water pressure were the faucet is running and a toilet is flushed. During the inspection appraiser will note all foul odors, leaks or any evidence of past leaks. Appraiser will check paint of homes built before 1978 for peeling or chipping. The appraiser must look in the attic for any water damage or light that should not be shining through. All deficiencies will have a comment in the report and photo if possible. A general interior photo will be taken of all rooms.

The inspection of the subject for a FHA loan is similar to a convention loan. The Appraiser will still measure the home, take photos, and write down property characteristics. The only major difference is that the appraiser will take a closer look at the home in greater detail. Some of the items might have to be fixed or require a more detailed test by a professional in the proper field.

FHA Quick Tips

  1. Cosmetic Repairs: All cosmetic repairs will not require to be fixed. They will be considered in the overall condition of the property. This can affect the comps used in the report. Some examples of cosmetic items are: Generally worn floors or carpeting, holes in window screens, faded paint, and outdated appliances or fixtures.

  1. Required Repairs: Repairs will have to be made under the follow conditions:

A. All repairs that would cause heath and safety issues to the occupants.

B. Any item that would affect the security of the property.

C. All physical deficiencies or conditions affecting the structural integrity.

  1. Further Testing: All items that would require further testing by a qualified individual:
    1. Infestation-Evidence of termites.
    2. Inoperative or inadequate plumbing, heating or electrical systems.
    3. Structural failure in framing member.
    4. Leaking or worn out roofs.
    5. Cracked masonry or foundation damage.
    6. Drainage problem.
    7. Any toxic mold issue.

FHA Residential Appraisal Requirements

Uniform Residential Appraisal Report (Fannie Mae Form 1004 March 2005) Required to report a one unit property or one unit with an accessory unit.

Manufacture Home Appraisal Report (Fannie Mae Form 1004C March 2005)

Required to report an appraisal of a one unit Manufacture Home.

Individual Condominium Unit Appraisal Report (Fannie Mae 1073 March 2005)

Required to report an appraisal of a one unit condominium or condominium PUD.

Small Residential Income Property Report (Fannie Mae 1025 March 2005)

Required to report an appraisal of a two to four unit property.