Crucial Facts of FHA

When you are looking to buy a home with one of these new low interest rate, low downpayment options offered by the FHA, there are certain minimum requirements the house must meet.  Having these requirements mostly protects the lenders.  In the case of foreclosure, they can guarantee a bigger return on their investment than if the place is a bust.  However, it is also operating under the philosophy that those who inhabit the home are more likely to work harder to keep the property because of the comfortable condition it is in.  The requirements of a house to receive a government backed loan are mainly concerned with safety.  An FHA appraiser will most likely look for items on this list.

• System and Appliances will be checked for functionality of utilities.
• Appliances themselves must work.
• All electrical outlets must be in working order and have cover plates.
• Proper & adequate drainage away from the foundation
• Heat system is properly functioning as well as A/C if applicable.
• Hot and cold water must be working in faucets and water pressure must be sufficient.
• All toilets must flush and be mounted.
• Water heater must be up to local code.
• Attics and crawl spaces must be properly ventilated or insulated with no significant damage, such as standing water or exposed wiring.
• Paint condition on homes built before 1978 will be inspected due to lead based paint being manufactured before then.  Any chipping or peeling will not pass.
• No termite infestation.
• No broken windows and all of them must be functioning as intended.
• Fire and carbon monoxide detectors must all be up to local code.
• Any hazard to health or safety or to the long term economic viability of the property will be subject to the FHA appraiser’s judgement.
• Cannot be over 2 layers of existing roofing

     These are the major deal breakers when it comes to getting your home appraised by the FHA.  The best thing to do is not get your heart set on a major fixer upper.  While it may prove easier to qualify for an FHA loan, it is not necessarily easier to find a home to purchase.  It is best to find a home you want to live in long term using an FHA loan, than as an investment venture.  Remember, you can always remodel and improve a quality, functioning home that maybe just has an outdated look.  It will still be a great investment!