FHA Loan Requirements
With multiple offers prevelent in the lower price ranges, FHA Loan Requirements are eliminating the possibility of offers with FHA loans being accepted.
Here is a list of common FHA loan requirements and conditons that appraisers are looking for. It appears the banks are no longer looking to the appraisers for home values alone but inspections as well. With all these requirements, I have to wonder if the FHA really wants to make loans at all.
Common FHA Required Repairs or Conditions Appraisers Look For
Utilities (All Systems must be tested and functioning)
· Electricity, water, and gas are on (propane included)
Water Heater
· Turned on and functioning
· Adequate gas exhaust ventilation
· Earthquake straps properly installed
· Pressure relief valve installed
· ¾” Pressure relief valve overflow pipe properly installed
Heating and Cooling Units
· Must be in place and in working order
Kitchen Appliances (Functional)
· Range/oven is required (only if a built-in)
· Free standing and slide-in units NOT required
· Dishwasher is required only if a built-in unit
Paint
· Correct chipping or peeling paint (pre-1978 built homes) this includes interior and exterior
· No bare wood (must be sealed paint or sealant)
Electrical Wiring (Adequate and not exposed)
· Adequate GFI plugs (1 per circuit near water)
· Main electrical panel (exterior and interior covers)
· Plug and switch covers must be installed
· Fixture sockets must be covered
· No exposed wiring (or romex) below 8 feet in garage
· Electric service must be 60 amp or greater. Electric certification may be required if 60 amp appears to be overloaded (ie., larger 1000 sq. ft. with many major electrical appliances)
Plumbing
· Adequate hot water
· Adequate water flow in all faucets and toilets
Firewall
· Fire door with an automatic closing mechanism (must close and latch automatically)
· No holes in wall, fire door, or finished garage ceiling (including animal doors or missing handles)
Windows
· Replace broken window panes (cracked ok)
· Windows must open adequately
· Security Bars must have one quick release per room
Pool and Spa
· Must be filled with clean water
· Filter must be functional
Miscellaneous Items (requiring repair or action)
· Floor coverings (no bare concrete)
· Roof covering (Roof certification needed if excessively worn or missing shingles. Roof should have 2-3 years of useful life remaining and no more than 2 layers of shingles.)
· Signs of water leaks on ceiling must be repaired
· Trash and debris must be removed
· Exposed metal support brackets in patio
· Standing water is no ok
· Very green (lush) area in yard = possible septic leak?
· Inadequate smoke alarms (must be at least one adjacent to all sleeping areas)
· Garage door opener (If there is one it must be working and properly adjusted)
· Safety handrails should be installed in open stairwells of three or more stairs
· Infestation of any kind should be exterminated (ie. Mice, bats, termites, etc.)
· Structural or foundation problems must be repaired
· If there is a crawl space, it will be homeowner’s responsibility to make this area accessible so that it can be thoroughly inspected.
· Floor coverings must be intact and not excessively soiled or stained
· Carbon monoxide detector (one at each level near bedrooms)
Other Conditions
· Any issues that are a risk to the Health and Safety of the occupants
With all these FHA Loan Requirements I say, good luck to buyers trying to buy a short sale or REO! Oh by the way, these are the same for VA and USDA loans as well.
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offer strong or not:
in the Governor Village neighborhood. It was a 3 bedroom/ 2 bath short sale with approximately 1640 square feet built in 1973 on just over a quarter acre, cul-de-sac lot. It sold for $185,000 which was $112.80 per square foot. It's list to sell price was 94.53%.
On the high end, was this custom two-story built in 2006 on just over one half acre within the gated Serrano Country Club. It has 5 bedrooms/4.5 bathrooms and approximately 6187 square feet which includes an office and media room. Among it's many amenities are Travertine floors, stone fireplaces, a built-in pool, outdoor fireplace and kitchen. It sold for $1,050,000 which is just under $170 per square foot.