Thread: HUD Inspections

Some of the recent foreclosure properties I have inspected, the client has indicated to me that they had a "HUD inspection". Can some of my Texas compadres (or folks from states other than Texas) compare a HUD inspection to a standard inspection.

The reason I ask is that when I was done with my inspection, the client has indicated in all cases where a previous "HUD inspection" was performed, indicated "they never said anything about that in the HUD inspection". I havent actually seen the HUD reports, so I dont really have anything to compare to. Im surprised that they didnt report on missing shingles, bad shingle application around roof penetrations, poor water pressure, slow draining plumbing fixtures etc.

One client told me that the HUD inspector did a hydrostatic pressure test on the plumbing system. He indicated the test pressure was 30 psig (?????). Water pressure at the main was almost 70 psig.

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HUD inspections are done when the home is being built, kind of like phase inspections.

When clients mention they need a HUD home inspection, basically they are telling you that they are getting a govt. assisted loan I believe.

They are told they should get a home inspection, so most assume they need a HUD home inspection.

I've had numerous people tell me that they gave HUD on of our TREC HI reports and HUD accepted it.

Here is a copy of the notice they get from HUD.

John,

Don't fret. The HUD inspection is your TREC inspection-- just be sure you give it all the alloted time needed. Reason being, HUD will usually get a copy from the homebuyer as proof they did get an inspection. From there, there is no real "review" of the report, only a scan thru to make sure there are no structural concerns as well as any significant high dollar items that are in need of replacement or imminent repair. The reason-- the Department of Housing and Urban Development doesent want folks to get into something that they will default on because they got in over their head-in with repairs.

In-other-words, do your normal thorough job as if you were inspecting for a family member (the usual).

Rich

Who pays for the HUD inspections, the bank holding the mortgage? My clients have indicated oh yeah, there was a HUD inspection done on the property, and I think they even get to look at it.

In Texas, is a HUD inspector a TREC inspector, and if so, why dont they have to report on our dreadful form, or do they?

Originally Posted by imported_John Smith

. HUD inspections,

HUD does their own inspection.

See attached form.

Originally Posted by Billy Stephens

HUD does their own inspection.

See attached form.

HUD does not perform the inspections. They are done by "Fee paid" Inspectors, like myself. They are only for new construction or 203K rehabs.

Originally Posted by Scott Patterson

HUD does not perform the inspections. They are done by "Fee paid" Inspectors, like myself. They are only for new construction or 203K rehabs.

I'm not saying that HUD does not encourage people obtain their own Fee Paid Inspector before making an offer on the property.

But they do an independent Inspection of their own Property.

As seen on THE VIEW & MARTHA STEWART

Originally Posted by Billy Stephens

I'm not saying that HUD does not encourage people obtain their own Fee Paid Inspector before making an offer on the property.

But they do an independent Inspection of their own Property.

As seen on THE VIEW & MARTHA STEWART

Billy, HUD does not employ it's own inspectors. They stopped this practice back in the mid 1980's, everything is done by fee paid inspectors who are paid by the builders.

Today Martha had a great show on fabric covered bookends and lemon icebox pie! The View, well lets say they were upset with the election results!

Originally Posted by Scott Patterson

Today Martha had a great show on fabric covered bookends and lemon icebox pie!

Ouu Fabric covered bookends and lemon icebox pie!

I'm checking the reruns.

Thanks Scott,

How do you get on the HUD approved List?

I''d cash a government check. $$$

HUD (actually their vendor) does perform home inspections on the foreclosures and post the report along with the description of the property. They call it the "Property Condition Report". This is a very, very , very, very (did I say very?) limited report based on someone walking in the front door and basically out the back. I would be very disappointed in any inspector who did not find issues that were not part of HUD's report. For a sample hud report, check out the link below;

http://www.tenmanagement.com/listing...763885_PCR.pdf

Or go to HUD Homes and search for homes in your area and check out their reports.

Originally Posted by Billy Stephens

Ouu Fabric covered bookends and lemon icebox pie!

I'm checking the reruns.

Thanks Scott,

How do you get on the HUD approved List?

I''d cash a government check. $$$

Go to this link
FHA Inspectors and 203(k) Consultants - HUD

The go to the bottom of the page to "Forms" and you will find the FHA Fee Paid Inspector application link. Fill out the form and send it in.

You are not paid by HUD/FHA or the VA. You are paid by the individual that is needing the inspection.

Originally Posted by Scott Patterson

Go to this link
FHA Inspectors and 203(k) Consultants - HUD

The go to the bottom of the page to "Forms" and you will find the FHA Fee Paid Inspector application link. Fill out the form and send it in.

You are not paid by HUD/FHA or the VA. You are paid by the individual that is needing the inspection.

Scott,

Greetings:

When I went to the link for the FHA/HUD inspector there was mention of evidence of passing the FHA/HUD inspector exam.

Where do you find this, am I just missing something or ???

Thanks Willie

Originally Posted by William Mize

Greetings:

When I went to the link for the FHA/HUD inspector there was mention of evidence of passing the FHA/HUD inspector exam.

Where do you find this, am I just missing something or ???

Thanks Willie

You need to read the top section of the application:

Compliance Inspectors: This application is to be submitted to HUD only after the inspector is licensed or certified to inspect repairs and construction, when such licensing or certification is required by the State or local jurisdiction where work will be performed. Upon availability, all inspector applicants currently recognized by HUD to conduct inspections must provide evidence of passing the HUD/FHA Inspector Examination.

Don't be surprised if your app gets bounced by a 'government clerk'. I was refused my 203k notation the first time I applied as I was told that I had to be a licensed architect and that I didn't meet the criteria.

It was a back/forth for many weeks and the 'government clerk' won! So ... I ducked low and resubmitted 4 months later and it went through without a question.

Go figure.

I also have my FHA ID and do a lot of FHA Final inspections as well. I've not been picked up for any 203k inspections in this market (DFW) yet.

HUD refused mine on the grounds that I didn't have the prerequisite number of inspections. They never asked me to send proof, I was just being honest when I filled in the blanks.

They proceeded to tell me that maybe I wasn't their kind of guy because I couldn't read. Go figure.

Ben

Originally Posted by Ben Christianson

HUD refused mine on the grounds that I didn't have the prerequisite number of inspections. They never asked me to send proof, I was just being honest when I filled in the blanks.

They proceeded to tell me that maybe I wasn't their kind of guy because I couldn't read. Go figure.

Ben

Hey it is bureaucracy at it's finest.

As you can see by a post above, you have to read everything on the application. They are picky, but as Nolan said, just send in another application at a later date.

I have attached another HUD form, "HOUSING QUALITY STANDARDS (HQS) INSPECTION FORM" available on:

CPD - Affordable Housing - Library - HOME Forms - HUD.

While it is a reassuring checklist of potential hazards were it accomplished by a competent inspector, it is not even close to a complete inspection.

Originally Posted by Ben Christianson

HUD refused mine on the grounds that I didn't have the prerequisite number of inspections. They never asked me to send proof, I was just being honest when I filled in the blanks.

They proceeded to tell me that maybe I wasn't their kind of guy because I couldn't read. Go figure.

Ben

How many inspections are required to apply? I don't see it on the form.

Originally Posted by Kevin Pierce

How many inspections are required to apply? I don't see it on the form.

I think it depends on the phase of the moon or if the person reviewing your application is having a bad hair day!

Originally Posted by Scott Patterson

I think it depends on the phase of the moon or if the person reviewing your application is having a bad hair day!

lol Guess I'll just send it in and see what happens.

Originally Posted by Rick Hurst

When clients mention they need a HUD home inspection, basically they are telling you that they are getting a govt. assisted loan I believe.

They are told they should get a home inspection, so most assume they need a HUD home inspection.

I've had numerous people tell me that they gave HUD on of our TREC HI reports and HUD accepted it.

Here is a copy of the notice they get from HUD.

Yes, this is correct.

(as if you needed me to tell you)

Originally Posted by Nolan Kienitz

Don't be surprised if your app gets bounced by a 'government clerk'. I was refused my 203k notation the first time I applied as I was told that I had to be a licensed architect and that I didn't meet the criteria.

It was a back/forth for many weeks and the 'government clerk' won! So ... I ducked low and resubmitted 4 months later and it went through without a question.

Go figure.

I also have my FHA ID and do a lot of FHA Final inspections as well. I've not been picked up for any 203k inspections in this market (DFW) yet.

Nolan,

Good to hear from you. Hey, I just resubmitted (don't ask - but think bureaucracy) my FHA inspector roster app. When I inquired about what is a 203K, they answered with... and I'm paraphrasing..."a 203K inspection is where an inspector is hired to inspect a property for someone needing a 203K inspection." I fell out.

When I repeated the question, I got the same response at which point I was afraid of being told what they told Ben C. - uh, if you don't understand, then you can't be one.

So...what is a 203K inspection? Thanks for your answer even if it is the same as HUD's.

Bruce

Originally Posted by JB Thompson

Nolan,

So...what is a 203K inspection? Thanks for your answer even if it is the same as HUD's. Bruce

The 203k consultant role is a process. All fees are established by HUD. You sort of end up being a ProjMngr for the rehab of the project.

I have ~ $1000 invested in software to help "simplify" the paperwork process from my role as a 203k consultant. I'm also hooked up with a couple of "approved" mortgage companies that can actually process 203k products. There are not very many who can or are approved.

Also, RE Agents prefer not to get involved with the 203k product due to paperwork and bureaucracy and/or lack of understanding.

In fact I had a call today from a lender who was going to try and process a 203k for a client and after I asked a few questions I found out he didn't know what he was talking about and his company was not approved to process same.

Here is an excerpt from the HUD website:

"The Section 203(k) program is the Department's primary program for the rehabilitation and repair of single-family properties. The program allows the borrower to get just one mortgage loan, at a long-term fixed or adjustable rate, to finance or refinance both the acquisition and the rehabilitation. "

Basically it's a loan for a distressed home that needs repairs and they roll the cost of the repairs into the home loan.

The 203k consultant inspects the home per the HUD 203k requirements, prepares docs for bids by vendors, gets bids, reviews bids, awards work, does draw inspections, finals inspections for completion, processes 203k paperwork for mortgage company, bank, etc., etc.. Close out project, get paid (throughout process) and move on.

I have an arrangement with the two mortgage companies I'm hooked up with to also do a regular HI somewhere in the mix and charge my normal rate for that plus some if the house is real bad as they burn up more time/effort ... as we all know how most of the rehab houses can look like up front.

I've seen/read/heard that the 203k product is very alive and well in various parts of the U.S., but it just hasn't re-established its legs in Texas yet from what I've seen.

I am the only license HUD 203k consultant #D0774 HUD.Gov in North East Texas. from Dallas to Shreveport Some in Dallas very few though compared to Home Inspectors .which there are many and i am Texas Inspector and proud off it. I do not like training Loan Officers how to do the program for free. It offers so much to the client that no other loans come close too in the market. It works for the handicap. And all other programs. I have been a consultant for HUD for 8yrs. I have worked well with wells Fargo on many occasions. I have worked with other loan officers and underwriters in other firms and they do not make me feel as comfortable as i like. And they need more training I know on my part the initial report is about 60 to 70 pages. only process i do larger amount is commercial inspections I compare that to my other license TRCC New construction one page per inspection FHA#w906 a few pages VA #0069 a few pages insurance adjuster#1132049 depends on the amount. Texas home inspection #5876 17- 20 pages for me #42310071146 VIPs insurance inspection 5 pages. FEMA IS about the same as home inspection number of pages and I have done cat adjuster work in my younger days much language to learn in that field . I know if guys that want to get in 203k consultant/ plan reviewer have to have a good feel for adjusting type knowledge and home inspector ability. What are they getting in me is that i oversee the project i am the decision maker for the government. In this process and my job is too look out for the client in the consulting process to look over the estimates and the designs of the plans and the draw process. I have to like his work.for the contractor to get paid. I go over Hud rules on renovation guidelines not TREC or TRCC Guidelines Just my thought on the consultant role and a lot of paper work to write up on each loan about 6 hrs for me to get it right for the goverment

Thanks for the info

Originally Posted by imported_John Smith

Some of the recent foreclosure properties I have inspected, the client has indicated to me that they had a "HUD inspection". Can some of my Texas compadres (or folks from states other than Texas) compare a HUD inspection to a standard inspection.

The following is an example of a HUD inspector delivering his report...



Well, OK there's a little more to it...

There's important qustions about the interior... like, "Is the Kitchen acceptable...?"
Of course, I would be inclined to ask...
Acceptable to who...? (Or, is it whom...?)

Here a sample HUD inspection form... (you can see the original by clicking here...)
Like I said... it's pretty simple...

As a FHA approved Compliance Inspector; and, as a 203(k) Consultant, I can assure you that the party who calls for the inspection pays for it. But, there is a difference between the two.
An FHA Compliance Inspector is approved to inspect the work performed for either rehab construction or new construction. If new construction, it may be for an individual home that will be finance by an FHA loan; or, it may be for multiple homes in a subdivision where the purchasers will be either FHA or VA borrowers. FHA has its own inspection guidelines that supersede any of our "standard" forms. These can be found on the FHA website. For all practical purposes, your standard inspection will suffice.
If the construction is a rehab, the work was probably financed by an FHA 203(k) loan. These loans take two different forms. One is the Streamline that can be for non-structural repairs up to $35,000. It is up to the lender if they want to have a Compliance Inspection, if the amount is less than $15,000. Above $15,000, HUD requires a Compliance Inspection even though the repairs are non-structural. Repairs requiring a permit, structural work or are more than $35,000 require the services of a 203(k) Consultant; and, the work must be inspected by an approved FHA Inspector. The Consultant and the Inspector do not have to be the same person; but, it is more efficient to be both.
To become an FHA Inspector, fill out the form referred to in an earlier post. As an ASHI qualified inspector, you qualify. To become a "Consultant," you have a minimum requirement of being either a licensed architect, a licensed engineer or a licensed general contractor.

Hey All,

I'm new to the boards and wanted thank everyone for their previous work on the subject, that said, I have some questions and hopefully you all have some answers or a direction to point me toward.

I recently started working for a Home Inspecting coming here in Portland, Or. and am looking to versify their business. They have been around for 20 years this year. Recently I've had conversations with many Mortgage brokers who've peaked my interest for HUD inspections. But, given all the information out there, I have yet to completely wrap my head around it.

Along with this site, I've visited the HUD website and gathered the information about becoming an inspector. What I am confused about is the different types of HUD inspections I guess? 203k, REAC, and so on.

A good friend of mine is currently remodeling his home with a government loan and was required to have a HUD inspection. What type of HUD inspector would that be...a 203k consultant? Or and FHA inspector? What would one generally charge for such a thing?

I've been researching the HUD REAC program and found a little spotty information regarding pay, time and amount of work. Obviously larger metro areas would have more need for REAC work, but the numbers I was getting were something like $300 pay for 8 hours of work? Does that make any sense? On top of that, inspections were only coming twice a week? Does this make any sense?

I've tried to call for more information, but all we get are answering machines. I tried calling Washington inspectors since it wouldn't be a conflict of interest, but no answer.

Does anyone have any suggestions to other types of inspections to look into?

I know my post was wordy and probably redundant to previous post here, but anyone willing to help would be appreciated.

Cheers,

Seth

I've been conducting FHA/HUD compliance inspections for several years. They are simple..HUD hads the required inspection form and inspection instructions...I generally charge $150-$250 keeping travel distance in mind. You do need to be HUD certified...Banks find you on the HUD certified by state list. I used to conduct REAC inspections, however, they required alot more time, lots of details, lots of pictures..not enough work in my area to keep me busy. You need to recertify if you go 3 or 6 months without conducting and inspection. REAC inspectors must attend a 5 day training certification class usually given in D.C.

The HUD property condition reports are poor at best. I've had occassion to follow behind these guys several times locally for a client interested in buying HUD repo's, so I can say this from first hand experience.
Items I noted not included in their reports not reported were missing shingle tabs (alot), rotten/missing sub flooring. Aluminium siding classified as vinyl. Its a joke. I understand guys can miss stuff, and make mistakes reporting , but these were blatant items I observed. It gives the rest of us a bad name.
I called the state HI board about it, asked them if this qualified as a home inspection under state law, it did. Asked if the inspector/company was licenced, they could not find one. Then I asked why/how it was allowed for an unlicensed party to provide services requiring a state license. They are investigating.
I'm interested to see how this turns out.

There are several types of HUD inspections...A REAC training course is a must for anyone wishing to be HUD certified..

There are MANY kinds of HUD inspections, including SPI inspections (Special Property Inspections) and REAC (Real Estate Assessment Center) inspections to name a few.

SPIs are/were done on foreclosed homes. REACs are done on apartments complexes with a HUD mortgage or Section 8 funding, public housing, and on multi-family properties with HUD mortgages, including skilled nursing facilities.

There's also HQS (Housing Quality Standards) inspections that are done on Section 8 properties not covered by REAC.

REAC inspections started out as a fairly good way to make money, but over the last few years, they have become quite a hassle and the money has not been as good.

A lot of REAC inspectors frequent the forum at reacinspectors.org (not dot COM, dot ORG.) You can find a lot more info over there, but the site also contains a lot of moaning and groaning about the business... but that might be something you want to know before spending a whole week in DC to take the REAC class.

I would talk probably a friend out of becoming a REAC inspector unless they were desperate for work, or unless they understood it is NOT a full time living - it is just one more thing you can have in your bag of tricks to make a living using your knowledge of buildings and computers.