When the Federal Housing Administration insures a home loan, they are taking on the risk of that investment should the homeowner default on the loan. If this happens, the home becomes the property of HUD and has to be resold for the money to be returned from the initial investment. Because of this, there are certain FHA home requirements that must be met before a loan will be given out on a property. This is the case whether the loan is for a first-time buyer, for new construction, or for a refinance on an existing loan. Before the risk of the investment can be taken on, the home has to be confirmed as valuable and worth the price of the loan. This is not an uncommon practice in the real estate market. Every lender requires a certain property minimum be met before loan approval. However, since the FHA is taking on the risk a little differently, they do have a slightly different set of standards.
The Reason for FHA Home Requirements
As mentioned previously, every home being sold in the real estate market has to meet a minimum property standard. This is just understood, across the board, because nobody wants to offer a loan on a property that appears to be in good condition, only to learn that the property is, in fact, a money pit.
So this is the basis for the minimum property standards. The FHA home requirements follow closely the building codes of most lenders with one notable exception; they pay very close attention to the durability of items used in the construction of a building. Most building codes don’t offer very strict requirements for windows and doors, paint and, cabinets, etc. The HUD minimum property standards take these items into account.
The Appraisers List
To make sure a home meets the minimum property standards, every home is appraised by an approved professional from the appraiser roster. These professionals know what to look for in an existing home or with a new construction. They look for the standards that all appraisers look for. This means they’ll look at the structure, the foundation, the roof, bedrooms, bathrooms, electric, plumbing, etc. But to make sure the building meets FHA home requirements they will take it one step further – this is where bathrooms, doors, etc get a good inspection. Here are a few examples.
In the bathroom they will check to see whether or not there is a wear resistant, non-absorbent tub surround that is at least six feet high. If there isn’t, that will be a mark against approval. Next, they will look at all of the doors in the home. It is required that the doors be at least 3 feet in width and 6 feet, 8 inches tall. Anything smaller than this is going to pose a problem.
In addition to the size of the doors, the professional will also look at the locks on the doors, particularly the exterior doors. Any door that opens into the interior of the home has to have a deadlock that meets FHA specifications. These specifications are, as quoted:
“Each exterior doorway and each doorway… shall be protect by a door which, if not a sliding door, shall be equipped with a deadlock using either an interlocking vertical bolt and striker, a minimum of 1.2 in, throw dead bolt or a minimum 1/2 in. throw self-locking dead latch.”*
In addition to these locks, any windows that could give an intruder easy access into the home must have a lock as well. And if you have a sliding door that is a main entrance, this must be a keyed lock.
All railings must be thirty six inches high, and attic and crawl spaces have to have proper ventilation in order to pass inspection. For the crawl spaces this means that from the bottom of the floor joists to the earth underneath the building there has to be proper ventilation. This can come in through openings in either a foundation or an exterior wall. These openings have to be at least one square foot in size per every one hundred and fifty square feet, and they have to be covered by a mesh wiring of some sort that has openings no smaller than 1/4 inch and no bigger than 1/2 inch. Here is another blog with some good information for loan approvals.
As mentioned above, these are some of the examples of the minimum property standards that a professional from the appraiser roster will be looking for. The standards are a little more intense than your typical building code, but not so intense that it’s impossible or even hard to do. They are simply in place to make sure the homes that are being backed by the federal government will maintain their value.
To find out what other requirements that are needed for the actual loan process you can find some more information here.