Buying with FHA Financing, Minimum Property Requirements
FHA requires a property have "minimum property standards" of livability. What does that mean?
The FHA appraisal asks: "Are there any physical deficiencies or adverse conditions that affect the livability, soundness or structural integrity of the property?" According to the U.S. Department of Housing and Urban Development (HUD), FHA requires properties meet the following minimum standards:
Safety: The home protects the health and safety of the occupants
Security: The home protects the security of the property
Soundness: The property doesn’t have physical deficiencies or conditions affecting its structural integrity
These requirements are intended to make sure than any home loan with an FHA guarantee is both livable and safe, without requiring any additional work or investment. These requirements are outlined in their Handbook 4905.1, Rev. 1, “Requirements for Existing Housing - One To Four Family Living Units,” and includes:
Safe and potable water
Sanitary facilities and a sewage disposal system
Domestic Hot Water
Electricity for lighting and equipment in the home
In more detail:
Electrical and Heating/Cooling:
The electrical box should not have any frayed or exposed wires.
ALL habitable rooms must have a heat source and must receive sufficient heat. (Exception: Homes located in the Caribbean, Hawaii and the Florida counties of Lee, Charlotte, Glades, Hendry, Palm Beach, Collier, Broward, Monroe and Miami-Dade do not require heat if, the lack of, is “typical” for the market area and does not adversely affect the marketability of the property).
For warmer climates where central air conditioning is common, if a central air system exists (i.e. ductwork, vents, etc) but is not operable, that's a problem. If no central air was ever installed, it is not required.
Roofs and Attics:
The roofing must keep moisture out.
The roofing must be expected to last for at least two more years.
The appraiser must have access to and inspect the attic for evidence of possible roof problems.
The roof cannot have more than three layers of roofing.
If the inspection reveals the need for roof repairs and the roof already has three or more layers of roofing, the FHA requires a new roof.
All broken windows must be replaced.
All windows must open and close properly
The water heater must meet local building codes, and must stay with the property. Hot water must be operable.
Hazards and Nuisances:
Hazards and nuisances include, but are not limited to, the following:
Proximity to a hazardous waste site
Oil and gas wells located on the property
Airport noise and hazards
Other sources of excessive noise
Proximity to something that could explode, like a high-pressure petroleum line
Proximity to high-voltage power lines
Proximity to a radio or TV transmission tower
The property must provide safe and adequate access for pedestrians and vehicles, and the street must have an all-weather surface so that emergency vehicles can access the property under any weather conditions.
Electric garage door openers must properly close, and reverse or stop when met with resistance during closing.
Any defective structural conditions and any other conditions that could lead to future structural damage must be repaired. These include defective construction, foundation cracks, excessive dampness, leakage, decay, termite damage, rodent infestation and continuing settlement.
There must be a working toilet, sink and shower.
FHA documents do not contain any specific requirements regarding appliances needing to be present, however our experience suggests that in many instances the FHA requires properties to have certain working kitchen appliances. That said, free-standing appliances, such as a range or refrigerator, are not necessarily required. Built-in appliances that have been removed or not yet installed must be in place and functioning. Example, if a built-in cooktop in the kitchen was missing, it would need to be replaced. But if there was simply a gap along the counter and base cabinets for a free-standing range to slide into, then it would not be required by FHA. A missing dishwasher, because it is also a built-in appliance, would be a red flag for the FHA appraiser. If a home has a defined opening for a dishwasher, with plumbing and electrical in place, then a working dishwasher must be in it. Also, any appliances that are present in the home must be functional and safe to operate.
Termites/Wood Destroying Organisms:
Termite/Rodent/WDO inspections are required in our area for all structures, except condominium units, which are above the first floor level. There can be no active infestation.
Cleaning or removing carpets is required only when they are so badly soiled that they affect the livability and/or marketability of the property.
A wood floor's finish that has worn off to expose the bare wood must be sanded and refinished.
Any lead-based or defective paint present must be removed/corrected.
Seriously cracked plaster or sheetrock require repair and repainting. In other words, there can’t be holes in the walls.
The FHA does not require the repair of cosmetic or minor defects, deferred maintenance and normal wear if they do not affect the safety, security or soundness.
If you, or anyone you know, is looking to buy or sell a home in Florida, please give us a call.
Peggy Berkoff, Broker/Owner North County Properties 19510 US Highway 1, Tequesta, FL 33469 Office: 561-427-0470 Cell: 561-301-2243 email@example.com
Zach Berkoff, Real Estate Agent Graham Auction Company 19510 US Highway 1, Tequesta, FL 33469 Office: 561-427-0520 Cell: 561-667-3720 firstname.lastname@example.org