FHA Guidelines for Real Estate Agents

When selling a home it is important to understand everything that will be required by the lender to ensure that the borrower can close their loan on the property. When listing a home and allowing offers using all types of financing, remember that there may be additional requirements depending on the type of loan. 

Loans backed by HUD, or the U.S. Department of Housing and Urban Development have additional criteria that will need to be met before a borrower can close a loan. These additional requirements are typically focused on health and safety. While the underwriter can always request additional repairs or inspections beyond those requested in the appraisal report, a few of the most common requirements are: 


Seismic Straps
In Northern Nevada the current building code requires that the water heater have dual aluminum straps around the top third and bottom third of the unit. Many homes have had their water heaters replaced and the straps were never reinstalled. Ensuring the water heater has dual straps will help the appraisal report be approved through underwriting faster, speeding up closing times. 

Peeling and Chipping Paint
HUD requires that there be no peeling and chipping paint anywhere on the property. This began as a lead-based paint issue, but has since evolved. The concern is now that anything that is peeling or chipping is likely exposing a subsurface to the elements which may lead to damage and deterioration over time. Siding, eaves, sheds, fences, chicken coops, decks, or anything else found on the property needs to be scrapped and painted if peeling or chipping paint is noticed. 

Permanent Heat Source
This is generally an issue in older homes where furnaces have been removed, or the home was originally heated by a style of heating that is no longer functional. HUD requires a permanent heat source that will keep the entire envelope of the home at 50 degrees or warmer. The heat source must also be fully hands-off. This means that wood stoves, pellet stoves, or other heat sources requiring human interaction over short time periods will not qualify. Additionally if the home has baseboard heating, each unit must be functional in each room. Broken units will need to be replaced prior to closing. No cooling source is required.