At-A-Glance FHA Home Requirements

1/15/2012 - This popular long running article regarding the FHA housing requirements from an inspectors point of view is being revamped and updated from the original version authored by me in about 2000. The majority of the original information is still right on the money. Enjoy the information!

Realtors and home buyers are always wondering what standard FHA Appraisers use when approving or rejecting a home for FHA financing. As a Home Inspector, they call me for the explanations. I am not an FHA Appraiser. My main source for the following information was the "FHA Guidebook for Appraisers." Better off known as HUD 4150.2, there were also state guidebooks that used to list specific requirements. When HUD went to regional hubs all of the state guidebooks went away and all that has come forth since are watered down requirements. I would absolutely hate to be an FHA Appraiser due to the lack of specifics with which to do their jobs. One thing is for sure when dealing with FHA inspections, and that is that nothing is for sure. So even if you find something on this list below, unless it is flagged by the FHA Appraiser, then unfortunately it is virtually a non-issue.

The following is a quick list of many common reasons for a home's rejection by an FHA Appraiser.

CRAWL SPACE

• Must have access to all of the crawl space areas. (This is often waived without mention and I have seen many portions of crawlspaces after their evaluation by the appraiser and I know I was the first to be there in decades, as evidenced by the spider webs and undisturbed earth)
• Major water build-up in the crawl space is not allowed and must be remedied.
• Any areas of wood rot must be removed and repaired. (In our area unless the home is pre-1960, they usually don’t even require a termite inspection)
• Ventilation & vapor barrier are required. (This is a joke around these parts and rarely ever mentioned)
• At least 18" clearance is required from the floor joist to the ground. (They often overlook the obstructions like pipes and ductwork)
• If the crawl space has been dug out, the earth cannot be disturbed within 1 foot of the stem wall or pier supports. If the earth has been disturbed, then a retaining wall should be installed. (This retaining wall should be overseen by a Structural Engineer, but rarely is)
• If a sump pump is used, it MUST be hard wired. Extension cord hook-ups are an extreme safety hazard and cannot be used. (Yet I see this all the time. I personally am more concerned about GFCI protection and that the wiring is up off the wet grade)

ATTIC SPACE

• Access must be provided (except where there is no attic space such as with some vaulted ceilings or in mobile homes).
• The attic access opening cannot be smaller than 14" x 22". (This is often waived on our older housing stock as long as you can get visual access through the smaller opening)
• Attic must be adequately ventilated, providing positive airflow with no dead airspace. (This is often waived through ignorance of the requirement and the need for ventilation).

ROOFING MATERIAL

• The roof must have at least 3 years of remaining life.
• Estimated life expectancies:

Rolled roofing:....................NOT acceptable for FHA.

Composition roofs:............average life 15-20 years

Wood shingle:.....................average life 16-22 years

Built-up roofs:....................average life 10-13 years

Torch down roofs:.............acceptable w/certification that roof was installed per manufacturer's specifications.

Metal roofs:.........................acceptable w/certification that roof was installed per manufacturer's specifications.

• Roofing on slopes of 2 1/2:12 or less MUST be installed by a licensed roofer using built-up roofing that meets the Uniform Building Code. Rolled roofing is not acceptable.
• FHA will accept a maximum of 2 layers of roofing material. If two or more layers of roofing exist and re-roofing is required, all of the old roofing must be removed as part of the re-roofing. The placement of composition shingles over wood shake shingles is not acceptable. (You cannot strip the comp shingles down to the original wood shingle layer and then install new comp over the wood shingle)

ELECTRICAL

• A single main shut-off breaker is required. (They have water this section down to the system needing to be deemed safe. This is a joke because the hard requirements that used to be the qualifiers of a safe system have been removed from the documentation)
• If more than one breaker must be tripped to disconnect the power, a new service panel is required. (They also watered this requirement down)
• The main service must be at least 100 amp. If it is less, a new service is required. (This requirement was also removed from writing. But let’s face it, all of the above should be minimal requirements for a safe residential system and still should be the minimal standard when determining if an electrical system will meet the demands of modern living with all of our electrical gadgets)

NOTE: These electrical requirements eliminate most pre-1960 homes that have not had an electrical upgrade. If FHA is the only financing option, then a 203K program should be considered to finance the improvement.

HEATING

• The heating and cooling system must have at least 2 years of remaining life. (Try and make this determination. Everybody squawks over this requirement)
• Wood stoves or solar heating are not acceptable as the sole heat source. NOTE: Coal or wood stoves with automatic stokers are acceptable.

NOTE: These electrical requirements eliminate most pre-1960 homes that have not had an electrical upgrade. If FHA is the only financing option, then a 203K program should be considered to finance the improvement.

HOT WATER HEATER

• MUST have an installed Safety Release Valve (SRV).
• The SRV must have a discharge line that drains to the outside of the home. It cannot be reduced in size from the valve outlet. In the case of a basement installation with a drain the discharge line must exhaust no more than 6" from the floor.

NOTE: The Safety Release Valve upgrade is usually under $20 for the valve plus installation.

LEAD-BASED PAINT

• All properties built prior to 1978 should be considered as target housing for lead-based paint hazards. Defective peeling/flaking paint on any interior or exterior surface must be identified and repaired following the EPA guidelines.

SEPTIC SYSTEMS

• Homes with septic systems are acceptable.
• Evidence of septic tank pumping and inspection within the last 5 years is required.

WINDOWS FOR SLEEPING ROOMS

• Escape or rescue windows shall have a minimum net clear openable area of 5.7 square feet. The minimum net clear openable height is 24" and width is 20". The maximum escape window sill height is 44".

NOTE: These window egress requirements may eliminate most pre-1960 homes that have not had a window upgrade. Small basement windows can be enlarged and upgraded. It has been my experience that most FHA Appraisers overlook this requirement unless the windows are inoperable or are set into an underground basement with 60" plus sill height. If FHA is the only financing option, then a 203K program should be considered to finance the improvement.