Safety First
FHA Minimum Property Standards
If you’re like most people, you have minimum standards for what matters to you. And at the top of that list is usually the home you own. Every year, thousands of Californians rely on the FHA loan program to buy a home or refinance a current mortgage.
Within the loan program guidelines, the FHA Minimum Property Standards are a set of requirements that ensure you are buying a house that is safe, secure, and structurally sound.
Find Out MoreQuick Overview of The Process
Before your loan application is approved for closing, a real estate appraiser will have to inspect the subject property and issue an appraisal report. In the report, the appraiser will confirm whether the property meets the FHA minimum property standards.
If it does, and all other conditional underwriting requirements are met, the underwriter will approve the loan application for closing.
What Are the FHA Minimum Property Standards?
There are three basic FHA Minimum Property Standards (MPS);
- Safety: The house is designed to ensure the safety of its occupants.
- Security: The structure provides a minimum standard of security.
- Structurally Sound: The house should be free of any structural defects.
These three standards provide a framework to ensure the house meets basic requirements for livability and value.
The Appraisal Report
Now that we know the FHA Minimum Property Standards framework, we can turn to the person responsible for disclosing the house’s condition: the real estate appraiser. When you buy a home or refinance your current mortgage, an appraiser prepares a report for the underwriter that includes a description of the home’s condition.
The appraisal report will include basic facts such as the property address, lot and house sizes, and the number of rooms and bathrooms. Along with these facts, the appraiser provides an opinion on the property’s condition.
The condition of the property occupies a significant portion of the appraisal report, and to further support their opinion, the underwriter will include images.
How The FHA Minimum Property Standards Help You
It would be incorrect to assume the FHA Minimum Property Standards are for the lender’s benefit. These requirements are designed with you in mind to make the loan process easier and give you peace of mind.
Without these requirements, you would have to hire a contractor to inspect the property and confirm that the house is safe, secure, and structurally sound, which could cost thousands of dollars.
FHA Minimum Property Standards Checklist
Below is a list of interior and exterior items the appraiser will review to ensure the house is safe, secure, and structurally sound. Notably absent are cosmetic touches, such as paint color or kitchen cabinet style, since these items do not affect whether the house meets the FHA Minimum Property Standards.
Exterior Property Requirements
Here are the main exterior property requirements the appraiser will review in their appraisal report.
- Road Access: Does the property have access to a public road to ensure the house is accessible? For example, if a fire truck were needed, could it easily reach the home to extinguish a fire?
- Foundation: A strong foundation is essential to the home’s structural soundness. The appraiser will walk around the entire house to check for any noticeable cracks that may be a concern. Also, if the foundation has any noticeable bulges or does not meet local building codes, the appraiser will note it in the appraisal report.
- Exterior Walls: Are any exterior walls missing an exterior coating (i.e., siding, stucco, etc.)? Are any walls warped or unfinished?
- Windows: An appraiser is primarily looking for broken windows; however, if they notice any gaps in the trim pieces, a favorite entry for rainwater, which can lead to mold, the appraiser will take a picture and notate the potential hazard.
- Roof: How old is the roof, and is it still effective at protecting the home from rain and other elements?
- Deck: If the house has a deck, is it built properly, and does it have the required safety features (railing, etc.)? If it’s a wood deck, is there any pest damage?
- Chimney: If the house has a chimney, the underwriter will want to know that it is free of structural issues and potential safety hazards.
Ensuring the exterior of the house is safe, secure, and structurally sound is essential to the FHA Minimum Property Standards.
Interior Property Requirements
Here are the main interior property requirements the appraiser will review in his/her appraisal report.
- Interior Walls: Does the house have any missing interior walls, and/or any walls that are damaged? If so that is a potential safety hazard and might cause an issue in underwriting.
- Flooring: Do all the rooms and bathrooms have flooring? Is it safe to walk on the flooring, or are there issues that prevent usage? A damaged floor would be a red flag in underwriting, especially if there were significant water damage.
- Staircase: If there is a staircase, is it safe to use? Is there a railing to hold on to?
- Home Appliances: Does the house have all the basic appliances, and are they in working order? If the stove is missing, the underwriter will require a stove be properly installed and in working order before they issue their final approval.
- Bathrooms: Do the sink, toilet, and, if applicable, shower or tub all function properly? Is there any water damage?
- Doors: Do the interior doors open and close properly, and are any of them damaged, posing a safety hazard? If so, be prepared for the underwriter to demand they be fixed before closing.
- Staircase: If the house has a staircase, is there a railing, and is the staircase damage-free?
- Windows: Do the windows appear to be in good working order, and free of water damage and mold?
An underwriter will review the appraisal report to ensure the house’s interior is livable and safe for the homeowner.
Final Thought On FHA Minimum Property Standards
If you are a homebuyer considering an FHA loan, you’ll want to speak with your loan officer about the current FHA guidelines and requirements. One crucial component of the FHA loan process is the FHA Minimum Property Standards.
A safe, secure, and structurally sound house is what’s needed to meet the FHA Minimum Property Standards. For the underwriter to make that determination, he/she relies on the appraisal report. In this report, the appraiser will provide their opinion on the property’s condition and include images to support the final assessment. The appraiser will cover both exterior and interior items to ensure the underwriter has a complete report.
