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FHA Repair Changes

Even though FHA made major change to their appraisal requirements, some Realtors are still concerned about Loans that require an FHA Appraisal. Most of these Realtors still have concerns because they are not aware of the changes that occurred in January of this year, or they have not seen these change first hand yet.

I have done several CHFA, and FHA Loans since these change and I can truly say that there is very little difference between an FHA Appraisal and a Conventional Appraisal today. Since Januare I have only had one CHFA Loan that need repairs, and they wer minor. Here are some of the major changes that occurred in January:

Examples of MINOR property conditions that no longer require AUTOMATIC repair for existing properties are:

  • Examples of Missing handrails;
  • Cracked or damaged exit doors;
  • Cracked window glass;
  • Minor plumbing leaks (such as leaky faucets);
  • Defective floor finish or covering (badly soiled carpeting);
  • Rotten or worn out counter tops;
  • Crawl Space with debris or trash;
  • Defective paint surfaces in homes constructed Post 1978

Examples of tests that may no longer be REQUIRED:

  • Wood Destroying Infestation Report-required if there is evidence of READILY OBSERVABLE ACTIVE infestation;
  • Well (Individual Water Test)-Required if there is knowledge that well water may be near sources of contamination;
  • Septic Test-required if evidence of system failure.


As you can see these were major changes!!

Posted Thursday Sep 28
( 08/28/08 01:47PM ) — Donna Harris, ASP

Bob, They made the seller repair/replace cracked tile??  HUH??  What does this have to do with "functionality of the home"?  We don't have much stucco in Dallas, but I would assume holes could allow critters in and FHA doesn't like termites or carpenter ants, and things like that, but tile?  How did you get past that?

( 08/28/08 01:52PM ) — Bob Willis

Donna,


I called FHA this morning, and the HUD person told me that the tile would only have to be replaced if it is a safety issue.  To me, it looks like a cosmetic issue only.  I'm working with the lender to try to get them to waive the tile and the grounding of outlets, as neither are required by HUD. According to HUD, the holes in the stucco are not required to be fixed either.

( 10/23/08 01:21PM ) — DO YOU THINK THIS WILL PASS?

I am a new home-buyer anxiously awaiting an FHA appraisal. Upon a walk-through with the family handy-man (a master plumber who used to do inspections), the home is sound with some noted exceptions:


-Two cracked (not broken) windows.


-A kitchen sink drain that slightly leaks after continuous use (previous homeowner tried to mitigate with tape along p-trap).


-One of the two toilets does not work properly. That is, it flushes, but does not hold a continuous water level over time. The second toilet works fine.


Again, the house is in decent shape for a 1983 build. If any of you have come across any of these problems, please let me know what the outcome was. Any feedback would be appreciated.


Thanks!


RD

( 10/23/08 03:43PM ) — George Souto

Sheree, sorry that I have not answered you sooner, but I did not know that you had left a comment on this blog.  The windows should not have to be replaced unless their condition is considered a safety hazard.


Bob, again sorry that I have not replied earlier for the same reason that I gave Sheree.  I agree with Donna's responce concerning the tile and stucco.  The other things that you mentioned;  All rooms need to have working heat, electical has to be safe, if pipes may cause damage they need to be replaced.


DO YOU THINK THIS WILL PASS, you are fine with the windows, and should be ok with the toilet, but if the leakaga is noticeble from the sink the may require that to be taken care of.

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