Repair/Inspection Requirements:

• FHA permits "as-is" appraisals on existing properties.
• Repair requirements are limited to only those items that pose a threat to the security/safety of an occupant and/or jeopardize the soundness and/or structural integrity of the property.  Items may include, but are not limited to:
  • Inadequate access/egress from bedrooms to exterior of home.
  • Leaking or worn out roofs.
  • Evidence of structural problems.
  • Defective paint surfaces in homes constructed pre-1978.
  • Defective exterior paint surfaces in homes constructed post-1978 where the finish is otherwise unprotected.
  • Conditions that will continue to require automatic inspection include, but are not limited to:
    • Standing water against the foundation and/or excessively damp basements.
    • Hazardous materials on the site or within the improvements.
    • Faulty or defective mechanical systems (electrical, plumbing or heating).
    • Evidence of possible structural failure (e.g., settlement or bulging foundation wall).
• FHA no longer mandates automatic inspections for the following items and/or conditions in existing properties:
  • Wood Destroying Insects/Organisms - required only if evidence of active infestation, mandated by the state or local jurisdiction, if customary of area, or at lender's discretion.
    • Refer to HUD's Pest Control Tip Zones to determine if a termite inspection or soil/wood treatment is mandated by the state where the property is located.
  • Well (individual water system) - test or inspection required if mandated by state or local jurisdiction; if there is knowledge that well water may be contaminated; when the water supply relies upon a water purification system due to presence of contaminants; or when there is evidence of:
    • Corrosion of pipes (plumbing)
    • Areas of intensive agriculture within 1/4 mile
    • Coal mining or gas drill operations within 1/4 mile
    • Dump, junkyard, landfill, factory, gas station, or dry cleaning operation within 1/4 mile
    • Unusually objectionable taste, smell or appearance of well water (superseding Mortgage Letter 95-34 that requires well water testing in the absence of local or state regulations).
    • Note: When well tests are necessary, testing standards outlined in Handbook 4150.2, Chapter 3, Paragraph 3-6, A-5a, still remain in effect and supersede Mortgagee Letter 95-34.
    • Less than the required minimum of 50 feet from a septic tank; 100 feet from a septic drain field and 10 feet from any property line.
      • Must follow local or state requirements if more strict.
      • If local or state requirements are less strict must document file provided not < 75 feet separation from the septic drain field and 10 feet from the property line.
  • Septic - test or inspection required only if evidence of system failure, if mandated by state or local jurisdiction, if customary to the area, or at lender's discretion.

o    Flat and/or unobservable roof

Source: Jim Wollen , Met life home loans