Technical Frequently Asked Questions

Information by State  Print version

Question: How does a new appraiser apply to perform FHA appraisals?

Answer: First, be sure that you meet the eligibility requirements and are listed on the National Registry at ASC. Go to the Appraisers Home page at http://www.hud.gov/appraisers/ and click on Eligibility requirements.

Question: How do I become an approved Home Inspector?

Answer: Although we strongly urge homeowners to get a home inspection before buying a home, HUD does not approve home inspectors. We do not retain a list, nor do we expect to in the future.

Question: How do I become an FHA Compliance/Fee Inspector?

Answer: Procedures to become an FHA Compliance/Fee Inspector can be found in Mortgagee Letter 2004-29.

Question: How do I become an FHA approved 203(k) Consultant?

Answer: To apply for placement on the FHA 203(k) Consultant Roster, an applicant must submit the information listed below to the HOC in the area in which he/she will be conducting business. Placement on the roster by one HOC will be recognized by all HOCs. However, the 203(k) consultant must notify the HOC if his/her primary location of business changes.

The application information should be submitted in the following format. A list or resume documenting:

	A minimum of three years experience as a remodeling contractor, general contractor or home inspector. A state license as a state certified engineer or architect may be submitted in lieu of the documentation of the three years experience;
	Education;
	Licensing (general contractor, home inspector, etc.). In those states where a Home Inspector is required to be licensed, the Department requires the applicant to be licensed and to provide proof of that licensing;
	A narrative description of the current/prospective consultant's ability to perform home inspections, prepare architectural drawings, use proper methods of cost estimating and complete draw inspections; and,
	The applicant must also submit a certification verifying that the consultant has read and fully understands the requirements of HUD Handbook 4240.4, REV 2 (203(k) Handbook) and all related materials listed in Attachment 1 of Mortgagee Letter 00-25.

Question: How can I get a Condominium approved?

Answer: The guidelines for submission of Condos is set forth in HUD Handbook 4150.1 Rev-1, Chapter 11. Generally, the necessary documentation is submitted to HUD by a mortgage lender. Since most mortgage lenders are familiar with the information necessary for HUD to process the request, we strongly recommend that individuals, such as buyers and builders, use the services of a lender to make a submission. Copies of the handbook can be obtained from the Internet, at HUD Clips , or may be ordered by calling (800) 767-7468.

Question: Can I do a spot loan on a Condo? Can I get a waiver for any of the items on the Spot Loan Certification?

Answer: Spot Condo procedures are in Mortgagee Letter 96-41. All requirements in the Mortgagee Letter must be met. If the lender needs a waiver on any of the items, the loan cannot be accepted using the Spot Loan process. The project should be submitted for full review by HUD staff.

Question: Does HUD require approval processing on a Planned Unit Development? (PUD)?

Answer: No. Please see HUD Mortgagee Letter 2003-02 Elimination of Planned Unit Development (PUD) Approval Requirements.

Question: Are UV (Ultra-Violet)lights acceptable on private water system?

Answer: Any water purification system must meet the requirements of Mortgagee Letter 92- 18.

Question: Does a well have to be tested for lead?

Answer: Yes. The minimum testing requirements can be found in Mortgagee Letter 95-34.

Question: Is there a new VC sheet?

Answer: As of January 1, 2006, the Valuation Condition (VC) Form is no longer being used.

Question: What is the policy with respect to the acceptance of basement kitchens?

Answer: Primary kitchens located in basement areas completely below grade render the property unacceptable. Primary kitchens in lower levels that have sufficient light and ventilation are acceptable. Examples of such properties are raised ranchers, bi-levels or row homes that have portions of their lower level at or partially below grade level. Second kitchens, regardless of the location, are acceptable.

Question: Are space heaters acceptable?

Answer: Space heaters should be acceptable provided they are permanently affixed, properly vented to the exterior or have an oxygen depletion device, and are in accordance with local codes. Also, the appraiser must make a determination whether or not the space heater provides sufficient heat to the room(s) where it is being used.

Question: What is the term of the warranty period required for a new roof?

Answer: There is no required term. It should be whatever is customary for the area, usually 10 years.

Question: How high must a crawl space be?

Answer: Generally we say 18 inches, however that distance is just a recommendation. The actual height should be enough to allow for routine maintenance of support systems. The appraiser must have access to the crawl space, and enter to the extent of head and shoulders at a minimum. The appraiser must look for evidence of infestation, rot or any other detrimental conditions.

Question: Regarding the private road maintenance agreement: Suppose one of the owners along the road will not sign the agreement?

Answer: The subject property should not be rejected. Private streets must be protected by permanent recorded easements or be owned and maintained by a HOA. Shared driveways must also meet these requirements.

Question: For 203(k) properties, how much commercial space is allowed?

Answer: See Mortgagee Letter 94-11 - Commercial cannot exceed 25% for a one story; 49%for a two story; 33% for a three story.

Question: Are storefront properties acceptable?

Answer: Yes, On 203(k) mortgages, the percentage floor area used for commercial purposes follows these standards:
One story building - 25 percent
Two story building - 49 percent
Three story building - 33 percent
but the rehab funds can only be used for the residential functions of the dwelling.

Question: Are rented hot water heaters acceptable?

Answer: No.