Complete FHA Inspection Checklist and Appraisal Guidelines

What is a FHA Inspection Checklist?

An FHA inspection checklist helps ensure that the property passes the General Acceptability Criteria established by the HUD. It guarantees that the roof, exterior, and foundation of a property are in perfect condition. A HUD-approved property appraiser performs the inspection using an FHA home inspection checklist 2018.

An FHA inspection is different from an FHA appraisal. The difference between an FHA appraisal and an FHA inspection is that an FHA inspection does not assign a value to a property. An inspection evaluates the condition of the property and determines potential safety issues.

The HUD requires an appraisal if you are going to apply for an FHA loan. The results of the FHA appraisal determine if the property is qualified for financing. FHA loans help low-income or low credit score people to buy a home. Qualifying for an FHA loan means you can get into a new home with as low as a 3.5 percent down payment.

In this article, the following points are explained:

1. What is important in an FHA inspection

2. What happens after an FHA inspection

3. Streamline your FHA inspection with an app

What Do They Look for in an FHA Inspection?

During an FHA inspection, the appraiser surveys the house. The assessment will include the property structure and other crucial details, such as the layout. The inspector makes a record of the findings, which becomes the basis of the report.

The Uniform Residential Appraisal requires the appraiser to report the description of the basic features of the house, such as the location, number of rooms, number of stories, the width and length of the property, and the year of construction.

If it is a condominium unit, the appraisal form asks for relevant information about the number of occupied units, the common areas, and the homeowners association.

The HUD requires that the properties financed through an FHA mortgage shall meet their minimum standards:

• Safety – the property must protect the health and safety of its occupants.
• Security – the home must provide security for the property.
• Soundness – the property should not have structural flaws.

These three things summarize the issues assessed in an FHA inspection. For a complete guide, you may refer to the guide of the HUD Department.

Some of the hazards the inspector will look out for, and therefore must be in the FHA inspection checklist are:

1. The Roofing
   The roof must be durable enough last up to two years. If the inspector finds that the roof will not last the required minimum of two years, the appraiser will recommend repairs or construction of a new roof. Any issues about the roofing, such as moisture, leaks, or cracks, appear in the appraisal report. If you hope to get an FHA loan, it is best to perform your inspection, guided by an FHA inspection checklist.
2. The Structure
   To keep its occupants safe, a property must have a safe and sturdy structure. An FHA home inspection checklist will check for leaks, severe structural damage, termites, moisture, and other signs of deterioration. These issues must be addressed before your FHA loan can proceed to the approval process.
3. Electricity, Water, and Heating System
   Each room in the house must have a reliable and adequate heating source. In addition, the electrical, water, and heating systems must comply with local building codes.
   
   An FHA inspection checklist must remind you to check the mechanical systems in the property, such as the central air conditioner and the furnace. You must watch out for damaged components and exposed wires.
   
   The checklist should also prompt you to examine the plumbing and check for defective wiring and pipe leaks. The inspector will check all these, plus the water heater and other major appliances.
4. Safety Hazards
   An FHA inspection will check the property for the presence of asbestos, contaminated soil, and other potential safety hazards. If the inspector finds damaged asbestos, he will require you to hire an asbestos expert to conduct another examination.
   
   Here are some safety hazards that your FHA inspection checklist must remind you to check for:
   
   • Contaminated soil
   • Presence of methamphetamine (meth) contamination
   • Proximity to a hazardous waste site
   • Presence of lead paint hazards
   • Oil and gas wells located on the property
   • Other sources of excessive noise
   • Proximity to something that could explode, such as a high-pressure petroleum
   line
   • Heavy traffic
   • Airport noise and hazards
   • Special airport hazards
   • Proximity to high-pressure gas lines
   • Proximity to Overhead Electric Power Transmission Lines and Local Distribution Lines
   • Smoke, fumes, and other offensive or noxious odors
   • Stationary storage tanks
5. Location
   The property must not sit in an area too close to a hazardous waste site to pass the FHA inspection. The location must also be free from loud noises. Some location-specific nuisances that could keep a property from passing an FHA home inspection:
   
   • The property is located within the Coastal Barrier Resources System
   • Presence of any encroachments
   • Topographic conditions, such as falling rocks and avalanches and earth and mudslides from adjoining properties
   • Grading and drainage problems
   • Instability of the soil on which the property stands
   • Land subsidence and sinkholes
   • Situated within a designated Special Flood Hazard Area (SFHA)
   It should be noted, however, that some of these nuisances do not automatically disqualify the property from an FHA mortgage. But the presence of the above issues requires the appraiser to make notations on the report.
6. Property Access
   To pass an FHA inspection, the property must have adequate and safe access for pedestrians and vehicles. It must have the space to allow emergency vehicles and all-weather surfaces so that fire trucks and ambulance cars can enter under any weather conditions.

What Happens After the FHA Home Inspection?

After the FHA home inspection, the inspector records the findings on an FHA form. For instance, after evaluating a detached single-family home, the inspector records the report in a Uniform Residential Appraisal. If there are issues, the inspector lists them in the report. It would help if you had them repaired so the HUD could approve your loan.

As for FHA appraisals, the HUD-approved inspector will do what’s customary in this process. He will compare the property to a similar one that has recently been sold in the same area. However, the most important factors in the appraisal are the health and safety of the occupants. The property will be valued less if it poses risks to the well-being of the residents.

Streamline your FHA Inspetion process with an pp

At every FHA inspection and appraisal, numerous photo evidence and detailed notes about the property must be submitted to the loan originator. The traditional way of providing all the evidence with pen and paper and recording an additional camera takes a lot of effort and time. Especially the preparation of reports takes a long time and is laborious.

So why not switch to a digital solution? With Lumiform, a mobile app for inspections, you can take unlimited photos of the property, capture detailed notes, and create comprehensive reports in real-time – all on your smartphone or tablet, without leaving the property.

The benefits of using an app for your FHA inspections at a glance:

• Create an unlimited number of digital templates with the form builder, and convert existing FHA documents into a digital form.
• Get started digitally right away by accessing over 12,000 free templates. You can also edit these to your needs.
• FHA inspections can also be scheduled, notifications are sent to your mobile devices.
Experience real-time data collection and perform detailed analytics with your collected data.
• Create FHA inspection reports automatically when you conduct property visits and inspections or record data from clients. Then send them immediately to your clients.
• Save all your digital documents securely in the cloud, preventing unauthorized people from gaining access.