FHA Loans are now a little easier to get

This change was made as of Jan. 1, 06 but I still see some of these conditions having to be repaired as part of the FHA process. I know lenders are mostly aware of this as are most appraisers. To you, the home buyer or seller, it means being able to buy a house without having to negotiate repairs such as paint, handrails and cracked sidewalks and being able to sell your home to more people without the hassle of having to fix the nit-picky items FHA used to dwell on.
This is direct from the FHA to lenders:

FHA PROPERTY INSPECTION REQUIREMENTS

EFFECTIVE WITH APPRAISALS COMPLETED JAN 1, 2006 AND LATER, FHA NO LONGER REQUIRES THE FOLLOWING MINOR CONDITIONS ON EXISTING PROPERTIES TO BE REPAIRED.

* Missing handrails
* Cracked or damaged exit doors that are otherwise operable
* Cracked window glass
* Defective paint surfaces in homes constructed post 1978
* Minor plumbing leaks (such as leaky faucets)
* Defective floor finish or covering (worn through the finish, badly soiled carpeting)
* Evidence of previous (non-active) Wood Destroying Insect/Organism damage where there is no evidence of unrepaired structural damage
* Rotten or worn out counter tops
* Damaged plaster, sheetrock or other wall and ceiling materials in homes constructed post – 1978
* Poor workmanship
* Trip hazards (cracked or partially heaving sidewalks, poorly installed carpeting)
* Crawl space with debris and trash
* Lack of all weather driveway surface

It is strongly recommended that a Home Inspection be done (approximate costs $250.00 - $450.00 that Borrower is responsible for). If any of the above items or additional repairs/conditions are found during a home inspection, these must be addressed between the Borrower/Seller prior to closing the loan.

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

* Termite Inspection (unless Appraiser notes active infestation)
* Well Test (individual water system) unless required by the Appraiser
* Septic Test (unless Appraiser notes evidence of system failure or use of a Water purification system due to presence of contaminants)
* Flat and/or unobservable roof or 3 layers or more

If the Appraiser requires any of these inspections they must be completed prior to closing and the cost will become part of your closing costs.

You may request any of the above inspections to be done prior to closing. These inspections must be signed off on as “acceptable” and the cost is your responsibility.

Your Lender, will assist you in the financing of your home, however, we are not responsible for any repairs/conditions related to the property. Therefore you should take all the necessary steps to assure you are satisfied with your purchase including a home inspection and other inspections.




Borrower Date Co Borrower Date

*Thanks to Randee Estep of Colony Mortgage for providing this form