Thread: Will the home qualify for an FHA loan?

I've got a realtor who is asking me to "inspect" some twenty foreclosed homes for the purpose of reporting (possibly only verbally) if the home will qualify for an FHA loan. I have not responded. I might like to do the work as things are very slow for me at the moment, but I'm not really sure what I'd be looking for. Can anyone out there point me in the right direction? I assume there are some minimal (or baseline) requirements, but I've never seen or read what they are. I'm also under the belief that FHA does not do inspections anymore like they did back in the sixties. If that is true, how would FHA be deciding if a particular house qualifies or not? Can anyone enlighten me on this issue?

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You should find a real estate appraiser that works with FHA. That will be the one you need to talk to...

Best

Ron

Robert,

Could be a lot of liability, yes I know there is already a lot of liability, but....

Are they talking about the house only? If not there is a lot to consider.

I have had contracts (FHA loan) fall through for some strange reasons that had nothing to do with the house itself. A friend of mine had this happen two weeks ago because a radio tower, across the road was to close to the lot.

The inspections themselves aren't a big deal. Talk to the guy or his boss and assess what they are really looking for. You can't tell them for sure whether the house will qualify for an FHA loan. It just isn't possible to say for sure. Even though agencies publish various info. There is always info that the agency employees are privy too that hasn't been/or won't be published for various reasons.
You can provide a PCR (property condition report) that will give them an overview of the house. Such a report will allow THEM to determine the likelihood that the house will qualify and/or what may need to be done to get it to qualify.
I would suggest modifying your HI contract or if you have a commercial contract to state things such as; this report does not adhere to the SOP as it is not a standard HI blah blah; this inspection uses HUD HQS and ASTM 2018 are as baseline blah, blah; 'published' FHA guidelines are followed as applicable, blah blah.
I do a lot of REO reports.

Originally Posted by Robert Autrey

I've got a realtor who is asking me to "inspect" some twenty foreclosed homes for the purpose of reporting (possibly only verbally) if the home will qualify for an FHA loan. I have not responded. I might like to do the work as things are very slow for me at the moment, but I'm not really sure what I'd be looking for. Can anyone out there point me in the right direction? I assume there are some minimal (or baseline) requirements, but I've never seen or read what they are. I'm also under the belief that FHA does not do inspections anymore like they did back in the sixties. If that is true, how would FHA be deciding if a particular house qualifies or not? Can anyone enlighten me on this issue?

Well, for one thing, you are in Texas. A verbal what and this is a Realtor asking you. It is a property that is going to be a real estate transaction and she is asking a home inspector to do a verbal finding on 20 properties.

You might want to rethink that. Not that care but if it goes back on you and your verbal findings and mother TREC finds out there just might be some nasty consequences.

Now that that Home Inspector License is around your neck I would be rather dutiful with what I inspect and report on. Remember that any findings in the negative about the homes the Realtor has to disclose to any potential client and she won't be putting her or his name to it.

Anyway. You really have to watch out how you handle things. I for one am not in the line of folks that think we should not be able to do any work on homes we inspect. I believe that just as a contractor finding concerns in a home that is about to be sold and then giving a price and doing the work......what the hell is the difference. Honest folks will be honest. Dishonest folks will be dishonest. It has been the same all thru time. Now we have this dam protectionism mode going on in the world where no one is allowed to look out after themselves.

As far as this Realtor it sounds like she wants to push the properties off with out a home inspection because she already had her man (you) state the the homes are FHA ready and approved.

Watch yourself.

Originally Posted by Markus Keller

The inspections themselves aren't a big deal. Talk to the guy or his boss and assess what they are really looking for. You can't tell them for sure whether the house will qualify for an FHA loan. It just isn't possible to say for sure. Even though agencies publish various info. There is always info that the agency employees are privy too that hasn't been/or won't be published for various reasons.
You can provide a PCR (property condition report) that will give them an overview of the house. Such a report will allow THEM to determine the likelihood that the house will qualify and/or what may need to be done to get it to qualify.
I would suggest modifying your HI contract or if you have a commercial contract to state things such as; this report does not adhere to the SOP as it is not a standard HI blah blah; this inspection uses HUD HQS and ASTM 2018 are as baseline blah, blah; 'published' FHA guidelines are followed as applicable, blah blah.
I do a lot of REO reports.

Not in this state. You inspect a home, then you must put your findings in a formatted report following the SOPs of the state. up to a four family. You can inspect up to a couple systems but still put them in a report and a full explanation of the findings and why you only inspected a couple systems. Again, all of it has to be disclosed by the Realtor.

Robert,

I'm not from Texas, and am used to all sorts of 'on the edge' situations (after, I live in one of the last frontiers). But this request would also make me very nervous. Sounds like he is trying to get by on the cheap - how much is he offering to pay? If he is like most realtors that I know, he's looking for some sort of a super deal for 20 units.

The only real way to establish conformity to FHA/HUD standards is to do real inspections, or better yet, an FHA Appraisal. Ron's suggestion about talking to a FHA certified appraiser is a good idea. Some local banks also have "inspectors" that do walk-throughs.

You can go to the HUD website and look at a variety of documents, including one intended for appraisers that sets minimum property standards - "Minimum Property Standards for Housing, 1994 Edition (4910.1)" at HUDClips -> Minimum Property Standards for Housing, 1994 Edition (4910.1)
and "Requirements for Existing Housing One to Four Family Units (4905.1)" HUDClips -> Requirements for Existing Housing One to Four Family Units (4905.1)