| In December, 2005 HUD announced changes to | | | | |
| the types of repairs and inspections it | | | | * Trip hazards (cracked or partially heaving |
| requires for residential properties. | | | | sidewalks, poorly installedcarpeting) |
| According to HUD: | | | | |
| | | | * Crawl space with debris and trash |
| "In a continuing effort to reform and | | | | |
| standardize its appraisal requirements, | | | | * Lack of an all weather driveway surface |
| | | | |
| FHA has shifted from its historical emphasis | | | | Examples of property conditions that may |
| on the repair of minor propertydeficiencies | | | | represent a risk to the health andsafety of |
| and now only requires repairs for those | | | | the occupants or the soundness of the |
| property conditions thatrise above the level | | | | property for which FHA willcontinue to |
| of cosmetic defects, minor defects or normal | | | | require automatic repair for existing |
| wear andtear. FHA Roster Appraisers are | | | | properties include, but arenot limited to: |
| reminded to report all readily | | | | |
| observableproperty deficiencies, as well as | | | | * Inadequate access/egress from bedrooms to |
| any adverse conditions discovered | | | | exterior of home |
| performingthe research involved in completing | | | | |
| the appraisal, within the appraisalreporting | | | | * Leaking or worn out roofs (if 3 or more |
| form. | | | | layers of shingles on leaking orworn out |
| | | | roof, all existing shingles must be removed |
| "Lenders should use professional judgment and | | | | before re-roofing) |
| rely uponprudent underwriting practices in | | | | |
| determining when a property condition posesa | | | | * Evidence of structural problems (such as |
| threat to the safety of an occupant and/or | | | | foundation damage caused byexcessive |
| jeopardizes the soundness andstructural | | | | settlement) |
| integrity of the property, such that | | | | |
| additional inspections and/orrepairs are | | | | * Defective paint surfaces in homes |
| necessary." | | | | constructed pre-1978 |
| | | | |
| In Mortgagee Letter 2005-ML-48 the following | | | | * Defective exterior paint surfaces in home |
| clarifications are shown: | | | | constructed post-1978 where thefinish is |
| | | | otherwise unprotected. |
| Repair Requirements | | | | |
| | | | Inspection Requirements |
| Examples of minor property conditions that no | | | | |
| longer require automatic repair for | | | | FHA no longer mandates automatic inspections |
| existingproperties include, but are not | | | | for the following items and/orconditions in |
| limited to: | | | | existing properties: |
| | | | |
| * Missing handrails | | | | * Wood Destroying Insects/Organisms: |
| | | | inspection required only if evidence ofactive |
| * Cracked or damaged exit doors that are | | | | infestation, mandated by the state or local |
| otherwise operable | | | | jurisdiction, if customary toarea, or at |
| | | | lender's discretion |
| * Cracked window glass | | | | |
| | | | * Well (individual water system): test or |
| * Defective paint surfaces in homes | | | | inspection required if mandated bystate or |
| constructed post 1978 | | | | local jurisdiction; if there is knowledge |
| | | | that well water may becontaminated; when the |
| * Minor plumbing leaks (such as leaky | | | | water supply relies upon a water purification |
| faucets) | | | | systemdue to presence of contaminants; or |
| | | | when there is evidence of: |
| * Defective floor finish or covering (worn | | | | |
| through the finish, badly soiledcarpeting) | | | | 1.Corrosion of pipes (plumbing) |
| | | | |
| * Evidence of previous (non-active) Wood | | | | 2. Areas of intensive agriculture within 1/4 |
| Destroying Insect/Organismdamage where there | | | | mile |
| is no evidence of unrepaired structural | | | | |
| damage | | | | 3. Coal mining or gas drilling operations |
| | | | within 1/4 mile |
| * Rotten or worn out counter tops | | | | |
| | | | 4. Dump, junkyard, landfill, factory, gas |
| * Damaged plaster, sheetrock or other wall | | | | station, or dry cleaning operation within |
| and ceiling materials in homesconstructed | | | | |
| post- 1978 | | | | 1/4 mile |
| | | | |
| * Poor workmanship | | | | 5. |