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Things to Look for in Your New Home When Financing With FHA

You’ve found the perfect house. The only problem is that it needs a little TLC. If you are a Do-It-Yourselfer, this shouldn’t be a problem. Right? Wrong. If you are looking to finance your new home with an FHA mortgage, the property still needs to meet the Federal Housing Administration’s Minimum Property Standards. Painted with a broad brush, this means that the property should be safe for its occupants, provide adequate security for the loan, and have structural integrity.

The good news is that a house can be in rough shape and still meet these minimum standards. Things like missing handrails, cracked window glass, crawl spaces packed with trash and overall poor workmanship are all okay as far as the FHA’s minimum standards are concerned. These types of problems can be fixed after you purchase the home. However, there are a number of conditions that the FHA says must be remedied before a home purchase can be financed through the FHA. Consequently, you should be on the lookout for these problems, which could end up being deal breakers:

  • An electrical box with frayed or exposed wires
  • All habitable rooms do not have a functioning heat source
  • A faulty roof that is not expected to last at least two more years
  • A hot water heater that does not meet local building codes
  • Hazards and nuisances like contaminated soil, proximity to a hazardous waste site, oil and gas wells on the property, sources of excessive noise (airport noise, heavy traffic, etc.), proximity to something that may explode (like a high-pressure petroleum line), being too close to high voltage power lines or radio or television towers
  • Property that does not have safe and adequate access (For example, the street must have an all-weather surface for emergency vehicle access under any weather conditions)
  • Any defective conditions that could lead to future structural damage
  • Asbestos that is damaged or deteriorating
  • A home without a working toilet, sink and shower
  • A home without working kitchen appliances, like a stove