BLOWNMORTGAGE.COM Lender Hotline: 888-581-5008 When you purchase a home, you want to have it inspected to ensure that it is safe and in good condition. If you are securing FHA financing, you are not required to have FHA inspectors come through your property, but the FHA does highly recommend it. Even if you do not have an actual inspector come through the property, the FHA appraiser’s job is to not only determine the appropriate value for the property, but also to ensure that it does not have any severe deficiencies that are going unseen and that HUD’s interest in the property you are purchasing is protected. The analysis prepared by the appraiser will ensure that all FHA criteria are met in order to meet the property requirements set forth by the FHA. HUD requires inspection of the property because the home is the collateral for the funding that the FHA is guaranteeing. If you were to foreclose on the property, the bank would have possession of it to sell it to someone else. If they have a home that does not meet city/county requirements or is in poor condition, it would be much harder to sell and would require the bank to take a serious loss. Having FHA inspectors take a look at the home and ensure its safety and stability is a way to protect both the borrower and the bank. The FHA looks for 3 things in a property: safety, security, and soundness. This means that the home will not pose a threat to any occupant’s health or safety and it does not contain any physical issues that could render the house ineffective. By requiring appraisals/inspections of the property, you are guaranteed to be moving into a safe, stable home. Site Inspections The inspection that the FHA appraiser begins with is the site itself. This includes an analysis of the topography, soil, off-site improvements, easements, and encroachments. Topography – The site grading is an integral part of the inspection as it helps to determine if the home will be subjected to water damage in the basement, crawl space, or difficulty with sewage. The main priority to get approved for an FHA loan is to determine if the foundation or any area near the foundation is free from seepage. If it is not, it needs to be determined that the water is being relocated away from the home to prevent damage. Soil – The soil is a part of the site, but requires its own inspection. Proper soil draining, rock formations, and any adverse conditions that may affect the foundation of the home should be inspected.

1. GETTING
THROUGH
UNDERWRITING
PROBLEMS
FHA Home Inspections
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2. When you purchase a home, you want to have it
inspected to ensure that it is safe and in good condition. If
you are securing FHA financing, you are not required to
have FHA inspectors come through your property, but the
FHA does highly recommend it. Even if you do not have an
actual inspector come through the property, the FHA
appraiser’s job is to not only determine the appropriate
value for the property, but also to ensure that it does not
have any severe deficiencies that are going unseen and
that HUD’s interest in the property you are purchasing is
protected. The analysis prepared by the appraiser will
ensure that all FHA criteria are met in order to meet the
property requirements set forth by the FHA.
BLOWNMORTGAGE.COM

3. HUD requires inspection of the property because the
home is the collateral for the funding that the FHA is
guaranteeing. If you were to foreclose on the property, the
bank would have possession of it to sell it to someone
else. If they have a home that does not meet city/county
requirements or is in poor condition, it would be much
harder to sell and would require the bank to take a serious
loss. Having FHA inspectors take a look at the home and
ensure its safety and stability is a way to protect both the
borrower and the bank.
BLOWNMORTGAGE.COM

4. The FHA looks for 3 things in a property: safety, security,
and soundness. This means that the home will not pose a
threat to any occupant’s health or safety and it does not
contain any physical issues that could render the house
ineffective. By requiring appraisals/inspections of the
property, you are guaranteed to be moving into a safe,
stable home.
BLOWNMORTGAGE.COM

5. Site Inspections
The inspection that the FHA appraiser begins with is the site
itself. This includes an analysis of the topography, soil, off-site
improvements, easements, and encroachments.
Topography – The site grading is an integral part of the inspection as it
helps to determine if the home will be subjected to water damage in the
basement, crawl space, or difficulty with sewage. The main priority to
get approved for an FHA loan is to determine if the foundation or any
area near the foundation is free from seepage. If it is not, it needs to be
determined that the water is being relocated away from the home to
prevent damage.
Soil – The soil is a part of the site, but requires its own inspection.
Proper soil draining, rock formations, and any adverse conditions that
may affect the foundation of the home should be inspected.
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6. Site Inspections
Off-site Improvements – Any improvements that are near the home, but
not directly on it should be inspected. This includes curbs, driveways,
and aprons – anything that would be within the boundaries of the home
but not directly attached to it. Care should be taken to determine if any
future plans are in the works from the governing agency regarding any
of these areas as well.
Easements – The presence of any easements should be noted and
inspected to ensure that they are not going to cause a problem with the
home ownership down the road.
Encroachments – Typically encroachments are not allowed for FHA
financing. The only exception to the rule is if there is a perpetual
encroachment easement filed with the county and it is provided to the
inspector and/or underwriter.
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7. Exterior Features of the Home
The exterior of the home will have to undergo inspection in order
to determine the eligibility of the loan for FHA approval. A few of
the things covered include:
Roofing – The roofing must be in good condition with all
shingles intact. In FHA terms this means that it must have a
minimum of 3 years’ worth of life left. If you reside in an area
where there is a great deal of rain or snow, the inspector will
look for water damage and the presence of leaks. There
cannot be more than 3 layers of roofing present either.
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8. Exterior Features of the Home
Attic – The attic must be easily accessed and ventilated.
There should not be any holes or damage to the support
structures and there should not be any water damage.
Foundation – There cannot be any cracks or leaks in the
foundation.
Location – If the property is located near landfills, areas with
hazardous items, or is surrounded by pools of harmful
chemicals or even standing water, it will not be eligible for
FHA financing.
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9. Interior Features of the Home
The interior of the home will undergo an extensive inspection in
order to determine if the home is worthy of FHA financing. The
areas inspected include:
Framing – All framing must be in good condition without any major
cracks. There should also be no visible holes, damaged walls, or any
type of water damage.
Basement – The basement must have easy access that is not blocked.
There should not be the presence of any water damage, nor should
there be any major cracks that compromise the integrity of the
structure.
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10. Interior Features of the Home
Crawl Space – The crawl space should be easily accessed and ample
space to perform any necessary maintenance. The support beams
should be intact and there should not be any signs of dampness or water
damage.
Heating – The furnace should be in good, working condition without any
loud noises, odd smells, or any deterioration. There should be a main
breaker that can shut off the electrical to the house. All rooms should be
able to be easily heated.
Electrical System – All electrical systems should be in good, working
order. All outlets should be functional, electrical switches should work,
and all wiring should be in good condition. There should not be any
exposed wires or any sparks/issues with any outlets.
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11. Interior Features of the Home
Plumbing – The water pressure should be adequate; hot
water should be working; toilets should be in good condition
and working; and there should not be any leaks in any of the
plumbing including showers and tubs.
Paint – All paint should be in good condition. If the home was
built before 1978, any chipped pain inside or outside is
unacceptable. If the home was built after 1978, chipped paint
outside is unacceptable.
Water Heater – The water heater must meet with the
particular city or county codes for the area the home resides.
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12. The FHA does not care about cosmetic issues; their main
concern is the health and safety of the occupants in the home.
Following are some concerns they would have with a home if
these issues were present:
Issues with stairs such as missing handrails or damaged
steps
Doors that do not work
Windows that are cracked or broken
Any type of leaks
Carpeting that is excessively soiled
Presence of termites and termite damage
Any type of trip hazard
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13. In addition, the FHA will look for any type of nuisance issues.
These things include:
• Located close to hazardous waste
• Excessive traffic
• Excessive noise (airport, train, etc.)
• Located near power lines
• Located near radio or television towers
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14. In general FHA inspections help to prevent the
sale of homes with any of these issues. If you
happen to fall in love with a home that gets
declined for FHA financing, there are options.
Sometimes the seller is willing to fix the
problems, which is the easiest solution. If not, it
is sometimes possible to increase the selling
price so that the issues get fixed and the
appraisal is passed and the seller still gets his
money back from the repairs.
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16. INFORMATION PROVIDED BY:
Justin McHood
Mortgage Commentator
Information Originally Published: 10/16/15
Justin McHood is Americas Mortgage Commentator and has
been providing Mortgage commentary for over 10 years.
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