What is a firewall? Defined by Wikipedia, it’s “a fireproof barrier used to prevent the spread of fire between or through buildings, structures, electrical substation transformers, or within an aircraft or vehicle.” The firewall shown below is a standard one found between a garage and a house as this wall serves to help stop the spread of fire. Do you see a problem with this firewall though?
The cost to repair the large hole is very minimal, but it’s still a safety issue for occupants, which means it is something that needs to be repaired for an FHA loan. I’ve actually seen this issue twice in the past month on investor flips in the Sacramento area, so clearly it’s not something that is being cured every time by sellers before the appraiser heads out.
Here is a photo of a “before” and “after” of a firewall breach. Have you seen a hole as such cause problems before in a house? Might rodents be able to get into the house this way too? Can you think of any other issues this might pose?

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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.
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).
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.