FHA Property Condition Screening Checklist


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As any investor who has ever sold a property to an FHA buyer knows, there is at least one mandatory FHA inspection that must be completed by the lender prior to the closing of the property. I often get asked what types of things do FHA inspectors/appraisers look for during these FHA inspections, and what types of things will cause a property to fail an FHA inspection.

An FHA underwriter that I have worked with on several occasions was kind enough to forward me a full list of “minimum FHA property requirements,” which essentially translates to the FHA inspection checklist. While this list is by-no-means a formal checklist followed by FHA inspectors, it’s a good set of guidelines. So, just because you meet all these requirements doesn’t mean you’ll pass an inspection, and just because you may not meet one or more requirements doesn’t necessarily mean you’ll fail an inspection. That’s up to the inspector/appraiser/underwriter to determine.

In other words, don’t put too much faith in this list, and don’t blame me if your inspector has other criteria that he uses…

In fact, as the document itself explains:

This list is for reference only and does not guarantee compliance with FHA Minimum Property Requirements. Minimum Property Requirements are to insure the health and safety of the occupants and/or the marketability of the property.

That said, here is the checklist/guidelines:

Site Hazards and Nuisances

Presence of the following may indicate unacceptable property condition:

  • Sinkholes
  • Active or planned gas-drilling within 300 feet
  • Within 75 feet of operating oil/gas well with no visible mitigation measures
  • Abandoned oil or gas well within 10 feet
  • Slush pits
  • Excessive noise or hazard from heavy traffic area
  • Dwelling or improvements within 10 feet of easement for high-pressure gas or petroleum line
  • Dwelling or improvements within fall distance for overhead towers (high-voltage, radio/TV, cell phone etc)
  • Excessive smoke, fumes, offensive noises or odors
  • Stationary storage tanks with more than 1000 gallons of flammable or explosive material

Soil Contamination

Presence of the following may indicate unacceptable property condition:

  • Surface evidence of underground storage tank
  • Proximity to dumps, landfills, industrial sites that could contain hazardous materials
  • Presence of pools of liquid, pits, ponds, lagoons, stained soils or pavement

Grading and Drainage

Presence of the following may indicate unacceptable property condition:

  • Grading does not provide drainage away from structures
  • Standing water near structures

Individual Water and Sewage Systems

  • Presence of the following may indicate unacceptable property condition:
  • Private sewage system show evidence of system failure
  • Separation between well and septic drain field less than 100 ft, (75 ft may be acceptable if local authorities allow.)
  • Separation between well and property line is less than 10 ft. (If local authority requires greater distance that requirement must be met.)
  • Property lacks connection to public water (Lender/jurisdiction may require water test and connection to public water if feasible)

Wood Destroying Insects

  • Presence of the following will require a termite inspection and treatment if infestation is present:
  • Structure is ground level and wood is touching ground
  • House or other structure show obvious evidence of infestation
  • Local jurisdiction requires inspection
  • Inspection is customary to the area

Private Road Access

Presence of the following may indicate unacceptable property condition:

  • Property inaccessible by foot or vehicle
  • Property accessible only by private road without permanent recorded easement

Floor Support Systems

Presence of the following may indicate unacceptable property condition:

  • Significant cracks
  • Evidence of water damage
  • Evidence of spongy/weak/rotted flooring

Framing/Walls/Ceiling

Presence of the following may indicate unacceptable property condition:

  • Significant cracks
  • Visible holes in exposed areas that could affect structure
  • Damaged plaster, sheetrock, or ceiling materials in homes constructed before 1978
  • Significant water damage

Attic

Presence of the following may indicate unacceptable property condition:

  • Inadequate access
  • Evidence of holes
  • Support structure damaged
  • Significant water damage visible from interior
  • No ventilation by vent, fan, or window

Basement

Presence of the following may indicate unacceptable property condition:

  • Blocked or inadequate access
  • Evidence of significant water damage
  • Significant cracks or erosion in exposed areas that affect structural soundness

Crawl Space

  • Presence of the following may indicate unacceptable property condition:
  • Blocked or inadequate access
  • Space inadequate for maintenance (recommended 18 inches)
  • Support beams not intact
  • Excessive dampness or ponding of water

Slab

Presence of the following may indicate unacceptable property condition:

  • Significant cracks that could affect structural soundness

Roof

Presence of the following will require a roof inspection and possible repair:

  • Missing tiles, shingles, flashing etc
  • Signs of leakage

Furnace/Heating System

Presence of the following may indicate unacceptable property condition:

  • Unit does not turn on
  • Heat is not emitted
  • Unusual noise
  • Smoke or irregular smell
  • Significant holes or deterioration on unit

Electrical System

Presence of the following may indicate unacceptable property condition:

  • Electrical switches don’t work
  • Outlets don’t work
  • Presence of smoke or sparks from outlet
  • Exposed frayed or unconnected wiring

Plumbing System

Presence of the following may indicate unacceptable property condition:

  • Significant drop or limitation in water pressure
  • No hot water
  • Toilets don’t function or have been removed
  • Toilet leaks
  • Sinks/bathtub/shower leaks (very minor leaks may be acceptable)
  • Sinks/bathtub/shower does not work or have been removed
  • Swimming pools not operational, in bad repair or not maintained

Paint

Presence of the following may indicate unacceptable property condition:

  • Chipped or peeling paint on interior or exterior of home and/or structures and improvements if home built before 1978.
  • Chipped or peeling paint on exterior surfaces if finish is unprotected (ie, bare wood) if home built after 1978.

Other

Presence of the following may indicate unacceptable property condition:

  • Missing or inoperable exterior doors
  • Broken or missing stairs
  • Absence of built-in appliances
  • Absence of free-standing stove (Santa Ana HOC only)





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