Guidelines for Anticipated FHA Repairs

Repair/Inspection Requirements

FHA permits only “as-is” appraisals on existing properties.

FHA appraisers will limit their repair requirements to only those items that pose a threat to the security/safety of an occupant and/or jeopardize the soundness and/or structural integrity of the property. Examples that may represent a risk include, but are not limited to:

•  Inadequate access/egress from bedrooms to exterior of home.
• Leaking or worn out roofs.
• Evidence of structural problems.
• Defective paint surfaces in homes constructed pre-1978.
• Defective exterior paint surfaces in homes constructed post-1978 where the finish is otherwise unprotected.

Examples of conditions that will continue to require automatic inspection include, but are not limited to:

• Standing water against the foundation and/or excessively damp basements.
• Hazardous materials on the site or within the improvements.
• Faulty or defective mechanical systems (electrical, plumbing or heating).
• Evidence of possible structural failure (e.g., settlement or bulging foundation wall).

 FHA no longer mandates automatic inspections for the following items and/or conditions in existing properties:

•  Wood Destroying Insects/Organisms – required only if evidence of active infestation, mandated by the state or local jurisdiction, if customary of area, or at lender’s discretion.
• Well (individual water system) – test or inspection required if mandated by state or local jurisdiction; if there is knowledge that well water may be contaminated; when the water supply relies upon a water purification system due to presence of contaminants; or when there is evidence of:
  • Corrosion of pipes (plumbing)
  • Areas of intensive agriculture within 1/4 mile
  • Coal mining or gas drill operations within 1/4 mile
  • Dump, junkyard, landfill, factory, gas station, or dry cleaning operation within 1/4 mile
  • Septic – test or inspection required only if evidence of system failure, if mandated by state or local jurisdiction, if customary to the area, or at lender’s discretion.
  • Flat and/or unobservable roof.