If you are planning on selling your flips to FHA buyers, you should understand what an appraiser/inspector for FHA looks for and what could prevent your property from qualifying for the buyers FHA loan.
This list is for reference only and does not guarantee compliance with FHA Minimum Property Requirements. Minimum Property Requirements are to insure the health and safety of the occupants and/or the marketability of the property.
That said, here is the checklist/guidelines:
Site Hazards and Nuisances
Presence of the following may indicate unacceptable property condition:
Sinkholes
Active or planned gas-drilling within 300 feet
Within 75 feet of operating oil/gas well with no visible mitigation measures
Abandoned oil or gas well within 10 feet
Slush pits
Excessive noise or hazard from heavy traffic area
Dwelling or improvements within 10 feet of easement for high-pressure gas or petroleum line
Dwelling or improvements within fall distance for overhead towers (high-voltage, radio/TV, cell phone etc)
Excessive smoke, fumes, offensive noises or odors
Stationary storage tanks with more than 1000 gallons of flammable or explosive material
Soil Contamination
Presence of the following may indicate unacceptable property condition:
Surface evidence of underground storage tank
Proximity to dumps, landfills, industrial sites that could contain hazardous materials
Presence of pools of liquid, pits, ponds, lagoons, stained soils or pavement
Grading and Drainage
Presence of the following may indicate unacceptable property condition:
Grading does not provide drainage away from structures
Standing water near structures
Individual Water and Sewage Systems
Presence of the following may indicate unacceptable property condition:
Private sewage system show evidence of system failure
Separation between well and septic drain field less than 100 ft, (75 ft may be acceptable if local authorities allow.)
Separation between well and property line is less than 10 ft. (If local authority requires greater distance that requirement must be met.)
Property lacks connection to public water (Lender/jurisdiction may require water test and connection to public water if feasible)
Wood Destroying Insects
Presence of the following will require a termite inspection and treatment if infestation is present:
Structure is ground level and wood is touching ground
House or other structure show obvious evidence of infestation
Local jurisdiction requires inspection
Inspection is customary to the area
Private Road Access
Presence of the following may indicate unacceptable property condition:
Property inaccessible by foot or vehicle
Property accessible only by private road without permanent recorded easement
Floor Support Systems
Presence of the following may indicate unacceptable property condition:
Significant cracks
Evidence of water damage
Evidence of spongy/weak/rotted flooring
Framing/Walls/Ceiling
Presence of the following may indicate unacceptable property condition:
Significant cracks
Visible holes in exposed areas that could affect structure
Damaged plaster, sheetrock, or ceiling materials in homes constructed before 1978
Significant water damage
Attic
Presence of the following may indicate unacceptable property condition:
Inadequate access
Evidence of holes
Support structure damaged
Significant water damage visible from interior
No ventilation by vent, fan, or window
Basement
Presence of the following may indicate unacceptable property condition:
Blocked or inadequate access
Evidence of significant water damage
Significant cracks or erosion in exposed areas that affect structural soundness
Crawl Space
Presence of the following may indicate unacceptable property condition:
Blocked or inadequate access
Space inadequate for maintenance (recommended 18 inches)
Support beams not intact
Excessive dampness or ponding of water
Slab
Presence of the following may indicate unacceptable property condition:
Significant cracks that could affect structural soundness
Roof
Presence of the following will require a roof inspection and possible repair:
Missing tiles, shingles, flashing etc
Signs of leakage
Furnace/Heating System
Presence of the following may indicate unacceptable property condition:
Unit does not turn on
Heat is not emitted
Unusual noise
Smoke or irregular smell
Significant holes or deterioration on unit
Electrical System
Presence of the following may indicate unacceptable property condition:
Electrical switches don’t work
Outlets don’t work
Presence of smoke or sparks from outlet
Exposed frayed or unconnected wiring
Plumbing System
Presence of the following may indicate unacceptable property condition:
Significant drop or limitation in water pressure
No hot water
Toilets don’t function or have been removed
Toilet leaks
Sinks/bathtub/shower leaks (very minor leaks may be acceptable)
Sinks/bathtub/shower does not work or have been removed
Swimming pools not operational, in bad repair or not maintained
Paint
Presence of the following may indicate unacceptable property condition:
Chipped or peeling paint on interior or exterior of home and/or structures and improvements if home built before 1978.
Chipped or peeling paint on exterior surfaces if finish is unprotected (ie, bare wood) if home built after 1978.
Other
Presence of the following may indicate unacceptable property condition:
Missing or inoperable exterior doors
Broken or missing stairs
Absence of built-in appliances
Absence of free-standing stove (Santa Ana HOC only)
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If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
If you are planning on selling your flips to FHA buyers, you should understand what an appraiser/inspector for FHA looks for and what could prevent your property from qualifying for the buyers FHA loan.
This list is for reference only and does not guarantee compliance with FHA Minimum Property Requirements. Minimum Property Requirements are to insure the health and safety of the occupants and/or the marketability of the property.
That said, here is the checklist/guidelines:
Site Hazards and Nuisances
Presence of the following may indicate unacceptable property condition:
Sinkholes
Active or planned gas-drilling within 300 feet
Within 75 feet of operating oil/gas well with no visible mitigation measures
Abandoned oil or gas well within 10 feet
Slush pits
Excessive noise or hazard from heavy traffic area
Dwelling or improvements within 10 feet of easement for high-pressure gas or petroleum line
Dwelling or improvements within fall distance for overhead towers (high-voltage, radio/TV, cell phone etc)
Excessive smoke, fumes, offensive noises or odors
Stationary storage tanks with more than 1000 gallons of flammable or explosive material
Soil Contamination
Presence of the following may indicate unacceptable property condition:
Surface evidence of underground storage tank
Proximity to dumps, landfills, industrial sites that could contain hazardous materials
Presence of pools of liquid, pits, ponds, lagoons, stained soils or pavement
Grading and Drainage
Presence of the following may indicate unacceptable property condition:
Grading does not provide drainage away from structures
Standing water near structures
Individual Water and Sewage Systems
Presence of the following may indicate unacceptable property condition:
Private sewage system show evidence of system failure
Separation between well and septic drain field less than 100 ft, (75 ft may be acceptable if local authorities allow.)
Separation between well and property line is less than 10 ft. (If local authority requires greater distance that requirement must be met.)
Property lacks connection to public water (Lender/jurisdiction may require water test and connection to public water if feasible)
Wood Destroying Insects
Presence of the following will require a termite inspection and treatment if infestation is present:
Structure is ground level and wood is touching ground
House or other structure show obvious evidence of infestation
Local jurisdiction requires inspection
Inspection is customary to the area
Private Road Access
Presence of the following may indicate unacceptable property condition:
Property inaccessible by foot or vehicle
Property accessible only by private road without permanent recorded easement
Floor Support Systems
Presence of the following may indicate unacceptable property condition:
Significant cracks
Evidence of water damage
Evidence of spongy/weak/rotted flooring
Framing/Walls/Ceiling
Presence of the following may indicate unacceptable property condition:
Significant cracks
Visible holes in exposed areas that could affect structure
Damaged plaster, sheetrock, or ceiling materials in homes constructed before 1978
Significant water damage
Attic
Presence of the following may indicate unacceptable property condition:
Inadequate access
Evidence of holes
Support structure damaged
Significant water damage visible from interior
No ventilation by vent, fan, or window
Basement
Presence of the following may indicate unacceptable property condition:
Blocked or inadequate access
Evidence of significant water damage
Significant cracks or erosion in exposed areas that affect structural soundness
Crawl Space
Presence of the following may indicate unacceptable property condition:
Blocked or inadequate access
Space inadequate for maintenance (recommended 18 inches)
Support beams not intact
Excessive dampness or ponding of water
Slab
Presence of the following may indicate unacceptable property condition:
Significant cracks that could affect structural soundness
Roof
Presence of the following will require a roof inspection and possible repair:
Missing tiles, shingles, flashing etc
Signs of leakage
Furnace/Heating System
Presence of the following may indicate unacceptable property condition:
Unit does not turn on
Heat is not emitted
Unusual noise
Smoke or irregular smell
Significant holes or deterioration on unit
Electrical System
Presence of the following may indicate unacceptable property condition:
Electrical switches don’t work
Outlets don’t work
Presence of smoke or sparks from outlet
Exposed frayed or unconnected wiring
Plumbing System
Presence of the following may indicate unacceptable property condition:
Significant drop or limitation in water pressure
No hot water
Toilets don’t function or have been removed
Toilet leaks
Sinks/bathtub/shower leaks (very minor leaks may be acceptable)
Sinks/bathtub/shower does not work or have been removed
Swimming pools not operational, in bad repair or not maintained
Paint
Presence of the following may indicate unacceptable property condition:
Chipped or peeling paint on interior or exterior of home and/or structures and improvements if home built before 1978.
Chipped or peeling paint on exterior surfaces if finish is unprotected (ie, bare wood) if home built after 1978.
Other
Presence of the following may indicate unacceptable property condition:
Missing or inoperable exterior doors
Broken or missing stairs
Absence of built-in appliances
Absence of free-standing stove (Santa Ana HOC only)
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125