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5. Appraisal Repair Requirements
Contents:
- a. FHA Policy on Appraisal Repair Requirements
- b. Types of Repairs
- c. Properties With Defective Conditions
- d. Additional Required Inspections by Qualified Entities
Change Date
Back to top4.5.aa. FHA Policy on Appraisal Repair Requirements
In the performance of an FHA appraisal, the appraiser must
- denote any deficiency in the appropriate section(s) of the appraisal report (site issues in the site section, improvement issues in the improvements section, and so on), and
- note those repairs necessary to make the property comply with FHA's MPR, or MPS, together with the estimated cost to cure.
The lender determines which repairs for existing properties must be made for the property to be eligible for FHA-insured financing.
Reference: For information on compliance inspection requirements, see HUD 4155.2 4.1.i.
4.5.bb. Types of Repairs
The types of repairs that may need to be made to a property include
- cosmetic repairs, and
- required repairs.
The table below describes cosmetic and required repairs.
| Type of Repair | Description |
|---|---|
|
Cosmetic repairs |
These repairs are not required, however, they must be considered in the overall condition rating and valuation of the property. Such repairs would include surface treatments, beautification or adornment not required for the preservation of the property. Generally, worn floor finishes or carpets, holes in window screens, or a small crack in a windowpane are examples of deferred maintenance that do not rise to the level of a required repair, but must be reported by the appraiser. |
|
Required repairs |
The physical condition of existing building improvements must be examined at the time of the appraisal to determine whether repairs, alterations or inspection are necessary or essential to eliminating conditions that threaten the continued physical security of the property. Required repairs must be limited to those required to
|
4.5.cc. Properties With Defective Conditions
A property with defective conditions is unacceptable for FHA insurance until the conditions have been remedied and the probability of further damage has been eliminated. Defective conditions include
- defective construction, and
- other readily observable conditions that impair the safety, security, or structural soundness of the dwelling.
4.5.dd. Additional Required Inspections by Qualified Entities
Typical conditions that would require further inspection or testing by qualified individuals or entities include
- infestation - evidence of termites
- inoperative or inadequate plumbing, heating, or electrical systems
- structural failure in framing members
- leaking or worn-out roofs
- cracked masonry or foundation damage, and
- drainage problems.
Reference: For more information on compliance inspection requirements, see
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