It’s a good idea for home owners, real estate agents and loan officers to be familiar with FHA appraisal standards so a house can be “FHA-ready” before the appraiser gets there. We all know FHA-required repairs are very common, but if you at least know some of the most frequent condition issues out there, you may be better prepared to avoid reinspections (and fees). Here is my “Top 10” list of FHA repair items I see in the field in the Sacramento area:
Defective Paint: FHA requires any defective paint surface to be properly cured. This means there shouldn’t be any chipping, flaking or peeling paint. This goes for houses built before 1978 because of lead-base paint, and even after 1978 because FHA is not okay with bare wood that could foster wood decay and not support the longevity of the property. Read more and watch video.
- No Carbon Monoxide Detector: It seems maybe only about 50% of homes I inspect for FHA loans have a carbon monoxide detector installed. FHA requires carbon monoxide detectors since it became California State law on July 1, 2011. Read more and watch video.
Missing Smoke Alarms: If the local county mandates smoke alarms, then they should be present for FHA loans. Many times there is a smoke alarm in the hallway, but they are frequently missing in each bedroom (or they are present, but not operable).
- Missing Appliances: If there is a space for an appliance in the kitchen, then it should be there and work properly – bottom line. This means if there is a space for a dishwasher, but no dishwasher, then there should be a _________ (answer: dishwasher). Regarding stoves, FHA only requires drop-in stoves, while slide-in stoves are not required (but the lender might require one). Read more and watch video.
- Garage Door is not Self-Closing: If the door from the garage to the house does not close automatically when you open it, then it’s a safety issue because the firewall door should automatically close. This is an easy fix because you’ll probably only need to replace the middle hinge on the door. Read more and watch video.
- Utilities Not Turned On: The appraiser needs to test all utilities and systems, so if something is not turned on, the appraiser will have to come back for a re-inspection.
Water Heater Pilot Not Lit: If the hot water heater pilot is not lit, the appraiser is not able to test to ensure the water heater is working or not.
- Doggy Door: If there is a pet door installed in the firewall door from the garage to the house, it is a breach of the firewall door. While it’s convenient for Fido, it’s an FHA safety issue. Read more and watch video.
- Exposed Wires: If there are any exposed wires from missing fixtures or anything else, that’s a safety issue. If you see anything that might seem like an electrical issue, it probably is.
- Broken Windows: Small cracks in windows are not an issue requiring correction for FHA, but large cracks or shards that may cause a potential for harm are definitely an issue.
Here’s a quick video I did on the most common FHA repairs:
I hope this was helpful. Let me know if you have any questions or insight. If you are in real estate, I’d be curious to hear what FHA issues you commonly see. If you are a local home owner or agent, feel free to email me or give me a call.
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All good info! I’ve definitely run into some of these issues on my transactions. It’s definitely better to have these things taken care of before the appraiser gets there to save money and time.
Thanks Lisa. I agree with you. Money can be saved by taking care of some of these obvious items. Granted, there is always the potential there will be another issue, but many times it’s really one of these “main and plain” items that needs correction. Sometimes I do reinspections (frequently actually) for something as simple as verifying a carbon monoxide detector was installed. I don’t mind dropping by the property and getting paid $100 or so for the re-inspection, but in truth these types of reinspections can be avoided.
Another good one!
Thanks so much, Tim. I really appreciate it.
We will be looking at getting an FHA loan this next summer to buy a home. Most homes in my area (Roseville) are short sales and fixer uppers…are the items on this list the responsibility of the buyer(us) or the homeowner…and if the home is owned by a bank what then? That has been one fear i can not get over that we qualify, find a home, and we do hope for a pre-1978 home and only to have the lender turn down funding it or the buyer refusing to sell it to us because we are FHA.
Hi Ruby. Thanks so much for checking in. Congratulations on your future purchase. It is very common for a house to need repairs when doing an FHA loan. Lenders and real estate agents are well aware of some of the top items needing to be repaired, so when the appraiser heads out and calls for a particular item, it’s often not a surprise. For example, I just got home from an inspection in the Tahoe Park area of Sacramento and there are 3-4 things that need to be repaired to meet minimum standards for FHA. These are low-ticket items, but they’ll still need to be covered before escrow closes. In this case the seller will have to pay for them.
Who covers the cost? It could be the buyer, seller or if you do an FHA 203K loan, then the loan will absorb the cost of repairs.
Don’t be worried or discouraged. Some houses of course won’t quality for an FHA loan, but just remember that FHA loans are dominant in the market right now, and there are many capable real estate agents and lenders to help you navigate to the right house and the right loan. I’m always happy to refer you to trustworthy contacts if you have a need.
Best wishes.
Would a plug-in carbon monoxide detector be ok to use for the purposes of meeting FHA standards in a real estate transaction?
Hi Darryl, the key is that you use a carbon monoxide detector that is approved by the California fire marshall (Lowes and Home Depot probably don’t sell any that aren’t, just as an FYI). On top of that, make sure you install the detector according to the guidelines laid out by the manufacturer. To answer your question, yes, a plug-in CO detector is completely fine. FHA has not stated otherwise. In fact, they really haven’t put anything in writing yet (but they’ll tell you verbally over the phone that carbon monoxide detectors are required). Just make sure it is an approved detector by the fire marshall and actually plugged in. It may be prudent to plug one in near sleeping areas on each level. Let me know if you have any questions.
Hi
i am going for a FHA loan in jersey city NJ and the appraisal report says that their is no firewall present with the attached dwelling so lender will not process the loan. i dont what will i do. will seller has to fix the repairs or who?
Hi Jeet. Thank you for touching base. If there is a garage present and no firewall between the garage and the living area, that’s definitely an issue. The repairs are really a matter of negotiation between you and the seller (whether the seller is a bank or an actual owner occupant). Your agent may be able to help open up conversation with the seller or Listing Agent on possible negotiations. That would probably be a first step. Ultimately if the repairs are not done, the loan cannot happen. Let me know if you have any other questions. I wish you the very best.
actually the appraisar said that there is no firewall between the the house and the next house attached to it. seller keep on saying that the house are not attached but when inspector went there and checked there is no firewall. my lender advice me to install a fire rated sheet rock on the wall and then it will be all fine. now i informed this to my attorney to let the seller know this and fix the issue.
i dont know the situation. if the seller will not do it will i get it done with 203. is it easy to get 203 and how much time it will take.
Hmm, it sounds attached, but I guess it’s not. Whatever the case it sounds like an easy fix if it’s just a matter of the right type of drywall. I hope that works out for you.
Does my UNattached garage need gutters? and does my attached garage need gutters? In Michigan. Thanks in advance.
Hi Craig, I am not aware of an FHA rule that states a house or garage has to have gutters, but if there is a problem with marketability of the property or drainage because of the lack of gutters, then there should be gutters. So if water is pooling up everywhere because of the lack of gutters, that’s probably something that needs to be cured. If other appraisers think differently, please speak up.