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