EXTERNAL FACTORS
1 Subsidence/Sink holes and slush pits
2 Operating oil or gas wells within 300 feet of the homes including gasoline stations
3 Abandoned oil or gas wells within 10 feet of new/existing homes
4 High-pressure gas or petroleum lines within engineering 10 feet of the property
5 Excessive noise or hazard from heavy traffic area
6 New/proposed construction in airport clear zone
7 Excessive hazard from smoke, fumes, offensive noises or odors
8 Proximity to dumps, landfills, industrial sites or hazardous materials
9 Overhead high voltage transmission lines within fall distance
10 Low voltage power lines may not pass directly over the primary living unit, including pools, on the property being insured by
HUD
11 Flood areas: Homes located in zones "A" and "V" (as stated on the FHA appraisal) will require flood insurance. Homes
located in zones "B" and "C" do not require flood insurance. Homes that require flood insurance and are not located in an
area where the National Flood Insurance Program is in force are not eligible for FHA financing. Properties subject to
frequently recurring flooding, subject to any potential hazard to life and safety or where escape to higher ground would not be
feasible during flooding are not eligible for FHA financing.
12 New and proposed construction is not eligible if any part of the home that is essential to the property's value and subject to
flood
ACCESS FACTORS
13 Accessible roads to home
14 Roadway surface, gravel is okay
15 Private road or shared driveway must have a recorded easement(s).
16 Private Road Maintenance by Home Owner's Association (HOA) or ownership of the roads by HOA.
ON-SITE FACTORS
17 New/proposed construction in Special Flood Hazard Areas
18 Stationary storage tanks with more than 1000 gallons of flammable or explosive material
19 Surface evidence of an Underground Storage Tank (UST)
20 Grading that provides positive drainage from structure includes gutters, downspouts and landscaping
21 Standing Water proximate to structure
22 Presence of pools of liquid, pits, ponds, lagoons, stressed vegetation, stained soils or pavement, drums or odors
23 Excess land is defined as that which is larger than what is typical in the neighborhood AND capable of a separate use.
Generally, the excess portion can be subdivided and marketed as an individual parcel. However, in small communities and
outlying areas, appraisers must use different criteria because the market may accept a wide variance in lot sizes. If the plot
contains excess land, the appraiser should describe it but not value it. In this instance, the appraisal is based upon a
hypothetical condition. A legal description of the portion being appraised is required. The lender will require that the excess
land be excluded from the mortgage security.
WELL & SEPTIC
24 Determine whether connection to a public water system is feasible. If feasible, hookup is mandatory. If community based
supply, the appraiser needs the company name, address and phone number.
25 A well must be a minimum of 50 feet from a septic tank, 100 feet from the septic tank's drainfield and a minimum of 10 feet
from any property line. If the property is served by dug wells, springs, lakes, cisterns or rivers it is INELIGIBLE.
26 Shared wells may serve existing properties which cannot feasibly be connected to a public or community water supply
system. A shared well shall have a valve on each dwelling service line as it leaves the well. A shared well shall service no
more than four properties. A shared well must have a shared well agreement and shall be binding upon signatory parties
and their successors in title. The agreement shall also be recorded in local Deed Records
27 Determine whether connection to a public sewage system is feasible. If feasible hookup is mandatory If community based
sewage, appraiser needs the company name, address and phone number.
28 If house is vacant an inspection of the septic is required
29 Readily observable evidence of On-site septic system failure
STRUCTURE
30 Structure and accessory buildings are ground level and/or wood is touching ground
31 The house and/or other structures show obvious evidence of active wood boring insect infestation
32 Floor support systems must not have significant cracks.
33 Framing/walls/ceiling must not have significant cracks
34 Evidence of water/leakage or damage
35 Evidence of rodent infestation
36 Visible holes in exposed areas that could effect structure
37 Significant water damage
ATTIC
38 Evidence of holes
39 Roof support structure intact or damaged
40 Significant water damage visible from interior
41 Ventilation by vent, fan or window. Note: The attic must be examined and entered
BASEMENT
42 Adequate access
43 Evidence of significant water damage
44 Significant cracks or erosion in exposed areas that could effect structural integrity
45 Soundness / Cracks / shift
CRAWL SPACE
46 Adequate access
47 Insulation, ventilation and any other structural problem
48 Distance from floor joists to ground a minimum of 18 inches from the bottom of joists
49 Support beams intact
50 The crawl space must be clear of all debris and trash and must be properly vented.
51 The crawl space must not be excessively damp and must not have any water ponding.
52 If dampness is noted, a vapor barrier is required.
53 Propane fired furnaces located in a crawl space area is not acceptable.
ROOFING
54 Covers entire house
55 Evidence of deterioration of roofing materials
56 Roof life is less than two years, a maximum of 3 layers of shingles is allowed.
57 Holes
58 Signs of leakage observable from the ground
59 All flat roofs require inspection by a roofer
Furnace/Heating System
60 Unit turns On and warm air is emitted
61 Heating does not emit smoke or unusual or irregular smell
62 Unit does not shut down prior to reaching desired temperature
63 Significant holes or deterioration on the unit(s)
64 Space heaters and others - must comply with local jurisdictional guidelines. Heating must be adequate for healthful and
comfortable living conditions
65 Homes with wood burning stoves or solar systems as the primary heat source must have permanently installed
conventional heating systems that can maintain at least 50 degrees Fahrenheit in all living areas
Air Conditioning (central)
66 Unit turns On and cold air is emitted with no irregular noise or smoke
67 Unit shuts down prior to reaching desired temperature
68 Significant holes or deterioration on the unit(s)
Electrical System
69 Electrical switches turn "on" or "off"
70 Presence of sparks or smoke from outlet(s)
71 Exposed wiring visible in living areas
72 Frayed wiring
Plumbing System
73 All water heaters must have a non-adjustable temperature and pressure-relief valve.
74 Toilets and faucets must function and not leak, with no significant pressure drop
75 Structural damage under fixtures, weak floors
76 Observable surface evidence of malfunction of Sewer System
77 Hot water must function
Other Health and Safety Deficiencies
78 Broken windows
79 Security bars are acceptable if they comply with local fire codes. Bedroom windows with security bars require a quick release
mechanism for emergency egress. If not so equipped or inoperable,
80 Broken or missing, or unsafe exterior stairs
81 Broken or missing exterior doors and jams, doors must open close and lock, no split jams
82 Inadequate/blocked entrances or exits
83 Steps usually require handrails on three or more risers
84 The mechanical garage door does not reverse or stop when meeting reasonable resistance during closing
85 Bedroom Egress: Occupants must be able to get outside the home if there is a fire.
86 Smoke detectors outside of sleeping area, must be installed in each hallway adjacent to the bedrooms.
87 On levels of the home that do not include bedrooms, at least one operating smoke detector must be centrally located.
88 The appraiser must operate a representative number of windows, interior doors, and all exterior and garage doors, as well
as verify that the electric garage door operator will reverse or stop when met with resistance during closing.
Lead Based Paint Hazard
For any home built prior to 1978, check for evidence of defective paints surfaces, including: peeling,
Scaling or chipping pant. Both exterior and interior surfaces must be inspected.
Evidence on interior
Evidence on exterior
Asbestos: Asbestos used as roof shingles or siding on a house does not pose a danger. When used as
a wrap for hot water pipes, it is usually covered and poses no danger. When the material is deteriorating
into a fine powder and can be inhaled, it may pose a danger to one's health. Asbestos should be
removed by an expert only in those cases where the deterioration poses a serious health threat; condition
otherwise the appraiser may for repair of the puncture or other damage.
Nonresidential use. Any nonresidential use of the property shall be subordinate to its residential use and character. A property,
any portion of which is designed or used for nonresidential purposes, is eligible only if the type and extent of the nonresidential
use does not impair the residential character of the Property. Areas designed or used for nonresidential purposes shall not
exceed 25 percent of the total floor area. Storage areas or similar spaces which are integral parts of the nonresidential portion
shall be included in the total nonresidential area. On 203(k) mortgages, the percentage floor area used for commercial purposes
follows these standards.
Stories Allowable % of Commercial Purpose
One story building 25%
Two story building 49%
Three story building 33%
WHAT TO EXPECT FROM AN FHA INSPECTION
These are the specific items that an appraiser must consider and note during the FHA
inspection of the property.