FHA loans are a popular option for financing a home purchase because of their relaxed credit requirements and low-down payments. However, it’s important to know that if you’re planning on buying a home with an FHA loan, the property you choose will need to meet certain standards. Here’s everything you need to know about FHA loan guidelines for home inspections.
Does the FHA Require a Home Inspection?
This can be confusing, especially for first-time homebuyers. While the FHA does not require home inspections, they do require an appraisal. This appraisal has an inspection component. An FHA-approved appraiser will visit the property and perform the inspection, checking to see that the home meets the FHA’s Minimum Property Standards.
What Do FHA Appraisers Check for?
When inspecting a property, FHA appraisers look for any damage, maintenance issues, and hazards that could make the property uninhabitable. In general, the FHA requires that property must be:
- Safe – The property must be safe for the buyer(s) to live in. Any issue that could hurt the buyer’s health and safety may result in a failed inspection.
- Sound – The home must be structurally sound.
- Secure – The home should be in a condition that does not compromise the security of the property.
If the appraiser finds any issues that fall into the categories mentioned above, they will include them in their report. This report is then handed over to your lender. Then, your lender will determine what repairs need to be made to bring the property up to standard so that it meets FHA loan guidelines.
Cosmetic Repairs Vs. Required Repairs
It’s important to know that the FHA does not require repairs for cosmetic or minor deficiencies. So long as these issues do not impose any hazard or affect the safety, structural soundness, or security of the property, the FHA allows them.
Some examples of cosmetic/minor defects include:
- Minor plumbing leaks
- Cracked window panes
- Poor workmanship
- Cracked sidewalks
- Missing handrails
- Other minor defects
What Could Cause a Failed Inspection?
Issues that affect the safety, security, or soundness of the property may result in a failed inspection. Either the seller will have to tend to these repairs or the buyer must pursue alternative funding options, such as an FHA 203(k) Loan.
Common issues that may result in a failed inspection include:
- Heating, plumbing, or electrical issues
- Leaking, damaged, or inadequate roofing
- Faulty or inadequate water heater
- Damaged or deteriorating asbestos
- Structural issues or issues that could lead to structural damage
- Exit doors that don’t lock
- Faulty gutters or downspouts
- Missing window screens
- Missing or defective kitchen appliances
- Other issues
If the inspector finds any of these issues, your lender will most likely require repairs before issuing your loan.
Learn More about FHA Loan Guidelines
Do you have questions about FHA loan guidelines, please do not hesitate to reach out! Call today to speak to an expert!
