HUD letter Outlines FHA Repair, Inspection, & Water Testing Requirements InspectAPedia® -
US HUD advice to consumers on water testing
US HUD Mortgagee Letter 2005- ML-48 to all real estate appraisers, and mortgagees
HUD guidance regarding FHA’s repair and
inspection requirements for existing properties and the use of the Fannie Mae
appraisal reporting forms
HUD and FHA water testing requirements
HUD and FHA home repair requirements to obtain financing
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The following is the December 2005 US HUD letter outlining
the current water testing requirements for people who are seeking FHA mortgage financing in the purchase of
a home. Website design & editing
FOR GENERAL ADVICE TO CONSUMERS ABOUT WATER TESTING (Not an
FHA document) see http://InspectAPedia.com/water/WaterTesting.htm Drinking Water Tests, Water Contamination Limits, Drinking Water Testing
Procedures
December 19, 2005
MORTGAGEE LETTER 2005- ML-48
TO: ALL
APPROVED MORTGAGEES
ALL APPROVED
APPRAISERS
SUBJECT: FHA
Repair and Inspection Requirements for existing properties and revisions to FHA
Appraisal Protocol
In September 2005, the Federal Housing
Administration (FHA) issued Mortgagee Letter 2005-34, which announced
the adoption of four of Fannie Mae’s revised appraisal reporting forms as
well as the release of Revised Appendix D of Handbook 4150.2, CHG-1.
This
Mortgagee Letter provides additional guidance regarding FHA’s repair and
inspection requirements for existing properties and the use of the Fannie Mae
appraisal reporting forms. All appraisal guidance for new construction that
serves as security for FHA-insured mortgages remains unchanged beyond the
clarification in the Revised Appendix D that the appraiser may appraise a home
that is under construction and that is 90% or more complete without benefit of
plans and specifications.
In a continuing effort to reform and standardize
its appraisal requirements, FHA has shifted from its historical emphasis on the
repair of minor property deficiencies and now only requires repairs for those
property conditions that rise above the level of cosmetic defects, minor
defects or normal wear and tear.
FHA Roster Appraisers are reminded to
report all readily observable property deficiencies, as well as
any adverse conditions discovered performing the research involved in
completing the appraisal, within the appraisal reporting form. Lenders
should use professional judgment and rely upon prudent underwriting practices
in determining when a property condition poses a threat to the safety of an
occupant and/or jeopardizes the soundness and structural integrity of the
property, such that additional inspections and/or repairs are necessary.
Revisions to the appraisal reporting guidance
contained in Chapters 2 and 3 of Handbook 4150.2, CHG-1 are limited to those
described in this Mortgagee Letter and Mortgagee Letter 2005-34 and Revised
Appendix D. The specific areas of guidance that are rescinded by this Mortgagee
Letter are delineated below. FHA intends to retire and replace Handbook
4150.2, CHG-1 in the near future.
Repair Requirements
As stated in Revised Appendix D, FHA now permits an
"as-is" appraisal for existing properties that serve as security
for FHA-insured mortgages when minor property deficiencies, which generally
result from deferred maintenance and normal wear and tear, do not affect
the safety of the occupants or the security and soundness of the
property.
FHA no longer requires repairs for these types of minor
cosmetic deficiencies to bring a property into compliance with FHA Minimum
Property Requirements.
Specifically, the guidance provided in Handbook
4150.2, CHG-1, Chapter 3, Paragraph 3-6, A-7 referencing all-weather road
surfaces; Paragraph 3-6, A-8 referencing poor workmanship; Paragraph 3-6, A-11
referencing debris and trash in crawl space; Paragraph 3-6, A-16 referencing
steps without a handrail; Paragraph 3-6, C referencing bare floors, badly
soiled carpeting and cracked plaster and sheetrock is no longer
applicable. Additionally, the guidance provided in Handbook 4905.1,
REV-1, Chapter 2, Paragraph 2-7, A-2 referencing all weather road surfaces;
Paragraph 2-8 referencing poor workmanship and Paragraph 2-14, C referencing
crawl spaces with debris and trash is no longer applicable.
Any reference
to the Valuation Condition form (form HUD-92564-VC) and protocol for its
completion contained in Handbook 4150.2 is no longer applicable as well.
Examples of minor property conditions that no longer require automatic repair
for existing properties include, but are not limited to:
Missing handrails
Cracked or damaged exit doors that are otherwise operable
Cracked window glass
Defective paint surfaces in homes constructed post 1978
Minor plumbing leaks (such as leaky faucets)
Defective floor finish or covering (worn through the finish,
badly soiled carpeting)
Evidence of previous (non-active) Wood Destroying Insect/Organism
damage where there is no evidence of un repaired structural damage
Rotten or worn out counter tops
Damaged plaster, sheetrock or other wall and ceiling materials in
homes constructed post- 1978
Poor workmanship
Trip hazards (cracked or partially heaving sidewalks, poorly
installed carpeting)
Crawl space with debris and trash
Lack of an all weather driveway surface
Examples of property conditions that may represent
a risk to the health and safety of the occupants or the soundness of the
property for which FHA will continue to require automatic repair for existing properties include, but are not limited to:
Inadequate access/egress from bedrooms to exterior of home
Leaking or worn out roofs (if 3 or more layers of shingles on
leaking or worn out roof, all existing shingles must be removed before
re-roofing)
Evidence of structural problems (such as foundation damage caused
by excessive settlement)
Defective paint surfaces in homes constructed pre-1978
Defective exterior paint surfaces in home constructed post-1978
where the finish is otherwise unprotected.
Lenders must review the appraisal to determine
whether the appraiser has reported any property conditions that will affect the
health and safety of the occupants or the security and the soundness of the
property and must require immediate repair where the property condition poses a
threat to these criteria.
Inspection Requirements
FHA no
longer mandates automatic inspections for the following items and/or conditions
in existing properties:
Wood Destroying Insects/Organisms: inspection required only
if evidence of active infestation, mandated by the state or local jurisdiction,
if customary to area, or at lender’s discretion
Well (individual water system): test or inspection required
if mandated by state or local jurisdiction; if there is knowledge that well
water may be contaminated; when the water supply relies upon a water
purification system due to presence of contaminants; or when there is evidence
of:
Corrosion
of pipes (plumbing)
Areas of
intensive agriculture within ¼ mile
Coal
mining or gas drilling operations within ¼ mile
Dump,
junkyard, landfill, factory, gas station, or dry cleaning operation within
¼ mile
Unusually
objectionable taste, smell or appearance of well water
(superceding
the guidance in Mortgagee Letter 95-34 that requires well water testing in the
absence of local or state regulations)
Septic: test or inspection required only if evidence of
system failure, if mandated by state or local jurisdiction, if customary to the
area, or at lender’s discretion
Flat and/or unobservable roof
Consequently, the guidance provided in Handbook
4150.2, Chapter 3, Paragraph 3-6, A-6 referencing mandatory termite inspections
for any structure that is ground level and for any structure where wood touches
the ground; Paragraph 3-6, A-5 referencing mandatory well and septic tests; and
Paragraph 3-6, A-12 referencing mandatory inspections for a flat roof is no
longer applicable.
Additionally, the guidance provided in Handbook
4905.1, REV-1, Chapter 2, Paragraph 2-5, B-1 referencing mandatory well water
tests is no longer applicable. In cases where well tests are necessary,
as described above, FHA’s existing testing standards outlined in Chapter
3, Paragraph 3-6, A-5a. of Handbook 4150.2 remain in effect and supercede
Mortgagee Letter 95-34.
If the appraiser reports a potential property
deficiency that may pose a threat to the safety of the occupants or the
security and soundness of the property, the lender will require an inspection
of the condition to determine whether repairs are necessary to mitigate or
resolve the problem.
Examples of conditions that will continue to require
automatic inspections include, but are not limited to:
Standing water against the foundation and/or excessively damp
basements
Hazardous materials on the site or within the improvements
Faulty or defective mechanical systems (electrical, plumbing, or
heating)
Evidence of possible structural failure (e.g., settlement or
bulging foundation wall)
Additional Changes to
Appendix D, Valuation Protocol
As a result of these changes in FHA’s repair
and inspection requirements for existing properties, Revised Appendix D of
Handbook 4150.2, CHG-1 has been updated. The following pages in Revised
Appendix D have been updated to reflect these changes: 2, 4, 19, 23, 27, 50,
55, 60, 85, 92, 112, 116 and 120. Revised Appendix D is attached to
this Mortgagee Letter and will be available online at:
http://www.hudclips.org/cgi/index.cgi
Conditional Commitment
Form
Mortgagee Letter 2005-34 instructed the mortgagee
to provide a copy of the completed form HUD-92800.5B (Conditional Commitment
Direct Endorsement Statement of Appraised Value) to the mortgagor at least five
business days prior to loan closing. The five-business day delivery date
prior to loan closing of the Conditional Commitment form is hereby rescinded
and lenders are instructed to ensure that the mortgagor receives either a
completed copy of HUD 92800.5B, or a copy of the completed appraisal report, at
or before loan closing.
This Mortgagee Letter is effective for all
appraisals performed on or after January 1, 2006.
If you have any questions regarding
this Mortgagee Letter, please contact your local Home ownership Center (HOC) in Atlanta (888) 696-4687, Denver (800) 543-9378, Philadelphia (800) 440-8647, or Santa Ana (888) 827-5605.
Sincerely,
Brian
D. Montgomery
Assistant
Secretary for Housing
Federal
Housing Commissioner
Attachment
FOR GENERAL ADVICE TO CONSUMERS ABOUT WATER TESTING (Not an
FHA document) see http://InspectAPedia.com/water/WaterTesting.htm Drinking Water Tests, Water Contamination Limits, Drinking Water Testing
Procedures
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Water Supply & Drain Piping, Wells, Pumps, Water Supply Equipment
Access Water Energy, PO Box 2061, Moorabbin, VIC 3189, Australia, Tel: 1300 797 758, email: sales@accesswater.com.au Moorabbin Office: Kingston Trade Centre, 100 Cochranes Rd, Moorabbin, VIC 3189
Australian supplier of: Greywater systems, Solar power to grid packages, Edwards solar systems, Vulcan compact solar systems, water & solar system pumps & controls, and a wide rage of above ground & under ground water storage tanks: concrete, steel, plastic, modular, and bladder storage tanks.
Cheating on water tests: Testing Water for Real Estate Transactions - make sure your water test is valid
Smart Tank, Installation Instructions [ copy on file as /water/Smart_Tank_Flexcon.pdf ] - , Flexcon Industries, 300 Pond St., Randolph MA 02368, www.flexconind.com, Tel: 800-527-0030 - web search 07/24/2010, original source: http://www.flexconind.com/pdf/st_install.pdf
Typical Shallow Well One Line Jet Pump Installation [ copy on file as /water/Jet_Pump_Grove_Elect_Jet_Pumps_1.pdf ] - , Grove Electric, G&G Electric & Plumbing, 1900 NE 78th St., Suite 101, Vancouver WA 98665 www.grovelectric.com - web search -7/15/2010 original source: http://www.groverelectric.com/howto/38_Typical%20Jet%20Pump%20Installation.pdf
Typical Deep Well Two Line Jet Pump Installation [ copy on file as /water/Jet_Pump_Grove_Elect.pdf ] - , Grove Electric, G&G Electric & Plumbing, 1900 NE 78th St., Suite 101, Vancouver WA 98665 www.grovelectric.com - web search -7/15/2010 original source: http://www.groverelectric.com/howto/38_Typical%20Jet%20Pump%20Installation.pdf
Water Fact Sheet #3, Using Low-Yielding Wells [ copy on file as /water/Low_Yield_Wells_Penn_State.pdf ] - , Penn State College of Agricultural Sciences, Cooperative Extension, School of Forest Resources, web search 07/24/2010, original source: http://pubs.cas.psu.edu/FreePubs/pdfs/XH0002.pdf
Water pressure tanks - how to diagnose the need for air, how to add air, stop water pump short cycling to avoid damage - water storage water pressure tank safety.
Books & Articles on Building & Environmental Inspection, Testing, Diagnosis, & Repair
Our recommended books about building & mechanical systems design, inspection, problem diagnosis, and repair, and about indoor environment and IAQ testing, diagnosis, and cleanup are at the InspectAPedia Bookstore. Also see our Book Reviews - InspectAPedia.
The Home Reference Book - the Encyclopedia of Homes, Carson Dunlop & Associates, Toronto, Ontario, 2010, $69.00 U.S., is available from Carson Dunlop, and from the InspectAPedia bookstore. The 2010 edition of the Home Reference Book is a bound volume of more than 450 illustrated pages that assist home inspectors and home owners in the inspection and detection of problems on buildings. The text is intended as a reference guide to help building owners operate and maintain their home effectively. InspectAPedia.com ® author/editor Daniel Friedman is a contributing author. Field inspection worksheets are included at the back of the volume.
Crystal Clear Supply provides portable ceramic water filter purifiers and portable reverse osmosis water treatment equipment - see http://www.crystalclearsupply.com/category_s/7.htm
Handbook of Disinfectants and Antiseptics, Joseph M. Ascenzi (Editor), CRC, 1995, ISBN-10: 0824795245 ISBN-13: 978-0824795245 "The evaluation of chemical germicides predates the golden age of microbiology..." -
This well-focused, up-to-date reference details the current medical uses of antiseptics and disinfectants -- particularly in the control of hospital-acquired infections -- presenting methods for evaluating products to obtain regulatory approval and examining chemical, physical, and microbiological properties as well as the toxicology of the most widely used commercial chemicals.
Potable Aqua® emergency drinking water germicidal tablets are produced by the Wisconsin Pharmacal Co., Jackson WI 53037. 800-558-6614 pharmacalway.com
Principles and Practice of Disinfection, Preservation and Sterilization (Hardcover)
by A. D. Russell (Editor), W. B. Hugo (Editor), G. A. J. Ayliffe (Editor), Blackwell Science, 2004. ISBN-10: 1405101997, ISBN-13: 978-1405101998.
"This superb book is the best of its kind available and one that will undoubtedly be useful, if not essential, to workers in a variety of industries. Thirty-one distinguished specialists deal comprehensively with the subject matter indicated by the title ... The book is produced with care, is very readable with useful selected references at the end of each chapter and an excellent index. It is an essential source book for everyone interested in this field. For pharmacy undergraduates, it will complement the excellent text on pharmaceutical microbiology by two of the present editors."
The Pharmaceutical Journal: "This is an excellent book. It deals comprehensively and authoritatively with its subject with contributions from 31 distinguished specialists. There is a great deal to interest all those involved in hospital infection ... This book is exceptionally well laid out. There are well chosen references for each chapter and an excellent index. It is highly recommended." The Journal of Hospital Infection.: "The editors and authors must be congratulated for this excellent treatise on nonantibiotic antimicrobial measures in hospitals and industry ... The publication is highly recommended to hospital and research personnel, especially to clinical microbiologists, infection-control and environmental-safety specialists, pharmacists, and dieticians."
New England Journal of Medicine: City Hospital, Birmingham, UK. Covers the many methods of the elimination or prevention of microbial growth. Provides an historical overview, descriptions of the types of antimicrobial agents, factors affecting efficacy, evaluation methods, and types of resistance. Features sterilization methods, and more. Previous edition: c1999. DNLM: Sterilization--methods.
U.S. Army Field Manual 21-10, Field Hygiene and Sanitation, 1988, web search 07/02/2010, original source: http://www.enlisted.info/field-manuals/fm-21-10-field-hygiene-and-sanitation.shtml The purpose of this manual is to assist individual soldiers, unit commanders, leaders and field sanitation teams in preventing disease and environmental injuries. The manual provides information on preventive medicine measures (PMM) to the individual soldier as well as essential information for the unit commander, unit leaders, and the unit field sanitation team on applying unit level PMM.
When Technology Fails, Matthew Stein, Chelsea Green Publisher, 2008,493 pages. ISBN-10: 1933392452 ISBN-13: 978-1933392455, "... how to find and sterilize water in the face of utility failure, as well as practical information for dealing with water-quality issues even when the public tap water is still flowing". Mr. Stein's website is www.whentechfails.com/
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HUD letter Outlines FHA Repair, Inspection, & Water Testing Requirements
