Photos of 5 common FHA loan issues

I wanted to share some photos of five common FHA condition issues I come across during appraisal inspections. If you see something like this at a property you’re selling or buying, it’ll likely require correction before FHA will guarantee the loan.

Green Pool Water: Yes, this is deemed a health issue. The water shouldn’t be green, right? Besides, if you cannot see the bottom of the pool, you never know if there is damage at the bottom anyway.

photo of green pool water

Empty Pool: An empty pool might be a skateboarder’s paradise, but it’s an obstacle to obtain financing due to being considered a safety issue. A pool like this one (covered, but empty) typically has to be filled up before the close of escrow. The lender will most likely ask the appraiser to go back out to the property to verify the pool has been filled (not verify whether it is actually working like it should since most appraisers aren’t pool experts).

Photo of covered empty pool

Paint Cans Hiding in the Crawl Space: There is no rule from FHA saying paint cans cannot be in a crawl space, but when I see something like this, it’s a red flag because chemicals should not have the opportunity to seep into the soil. Since calling out potential health or safety issues is sometimes a subjective decision for the appraiser to make, it’s important to contact HUD on occasion as well as reach out to fellow local appraisers to say, “would you call this out too?” In this case, all that needs to happen is for the containers to be removed from the crawl space. That’s easy enough, right? By the way, regarding the attic and crawl space, a bit of debris is fine, but anything excessive could likely be an issue requiring repair.

Photo of paint cans in the crawl space

Security Bars without Safety Release: If there is no safety release mechanism on a set of security bars, that’s an obvious safety issue that’ll need to be corrected before FHA can guarantee the loan. Usually the bars are removed and then the appraiser will go snap a photo to show the lender the bars were removed.

Photo of security bars without safety release mechanism

Dangling Wires: Electrical wires hanging from the ceiling or walls is a big deal since even small wires can cause a huge jolt and be life-threatening too. If you see wires like this in a house heading toward FHA financing, expect to have to solve the problem by installing a new fixture (or doing electrical work if need be).

Photo of dangling wire on ceiling

I hope this was helpful. Let me know if you have any questions. I’ve written quite a few FHA appraisal articles in case you wish to learn more about what to expect during the appraisal process.

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

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