February 25, 2020

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FHA Loan Reader Questions: Appraisals, Moldy Bathrooms, and Dirt Floor Basements


A reader asks, “Can I get an FHA loan if the home has a dirt floor basement and mold in the bathroom?”

There are two important things FHA loan applicants should know about the FHA appraisal process.

One is that the FHA does not have a complete, exhaustive list of every type of issue a home might have that could disqualify it from FHA loan approval. Second, the FHA requires homes be in compliance with state and local building code.

Any situation that is not code compliant for the state or local authority would not pass for the FHA, either. In such cases the FHA appraiser might require corrections, repairs, or other modifications as a condition of FHA loan approval. In other cases the problems may be so bad that the home cannot pass the appraisal at all. It all depends on the situation.

It’s possible that the mold issue could require attention as a condition of FHA loan approval–FHA loan minimum property requirements include the stipulation that the home be safe and habitable.

Mold could not only pose a health problem, but could also affect the resale value of the home. Depending on the severity of the issue, the appraiser could recommend mold abatement or other steps as a condition of the loan.

Borrowers who are concerned about specific issues with a potential property such as the dirt floor basement should first contact their local code authority to see if the condition is in or out of compliance with state or local code. From there, you’ll be able to determine whether or not the home might pass the appraisal process on that level.

For more information on FHA minimum property requirements (there are some that go above and beyond state/local building code) contact the FHA directly at 1-800 CALL FHA.

Some conditions automatically disqualify a home from an FHA loan even if the property does meet local or state building code–for example, a home located in certain special flood zones or within high voltage transmission easements would not qualify. Contact the FHA to learn more.

Do you have questions about FHA home loans? Ask us in the comments section.

Joe Wallace - Staff Writer

By Joe Wallace

June 12, 2013

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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