November 22, 2017
What are the property requirements for an FHA home loan? There are some basic minimum standards listed in HUD 4000.1 that can help future FHA loan applicants understand the basics, but it’s important to remember that local building code, health standards for water and sewage, and other regulations may also apply.
General FHA Loan Requirements For Homes To Be Purchased With An FHA Mortgage
HUD 4000.1 states that it is the lender’s responsibility to make sure “each living unit” has the following features as required in HUD 4000.1:
-a continuing and sufficient supply of safe and potable water under adequate pressure and of appropriate quality for all household uses;
-sanitary facilities and a safe method of sewage disposal. Every living unit must have at least one bathroom, which must include, at a minimum, a water closet, lavatory, and a bathtub or shower;
-adequate space for healthful and comfortable living conditions;
-heating adequate for healthful and comfortable living conditions;
-domestic hot water;
-electricity adequate for lighting, cooking and for mechanical equipment used in the living unit.
State or local law, and lender standards may factor into how these requirements are interpreted and applied.
In only one specific instance does the FHA loan rulebook apply a minimum size requirement-manufactured housing must have no less than 400 square feet of floor space. In cases where an FHA One-Time Close construction loan or FHA rehab loan is used, these requirements may not be in place until the construction or rehab phase of the loan is complete. Compliance inspections may be required as a condition of loan approval.
FHA Loan Rules For Power Lines And Other Safety Issues
FHA home loan rules state that overhead power transmission lines must, when present, do not violate FHA minimum property requirements. Those requirements include but may not be limited to the following:
“The Mortgagee must confirm that any Overhead Electric Power Transmission Lines do not pass directly over any dwelling, Structure or related property improvement, including pools. The power line must be relocated for a Property to be eligible for FHA-insured financing. The residential service drop line may not pass directly over any pool, spa or water feature. If the dwelling or related property improvements are located within the Easement area, the Mortgagee must obtain a certification from the appropriate utility company or local regulatory agency stating that the relationship between the improvements and Local Distribution Lines conforms to local standards and is safe.”
FHA Loan Rules For Properties Near Abandoned Oil Or Gas Wells
Obviously, many suburban homes would not be affected by the rules we’re about to cite from HUD 4000.1, but for those that are affected, the following standards are very important:
“If the Property contains any abandoned gas or oil wells, the Mortgagee must obtain a letter from the local jurisdiction or appropriate state agency stating that the subject well was permanently abandoned in a safe manner. If the Property contains any abandoned petroleum product wells, the Mortgagee must ensure that a qualified petroleum engineer has inspected the Property and assessed the risk, and that the appropriate state authorities have concurred on clearance recommendations.”
In all cases, state or local building code, laws, and ordinances may also apply. FHA loan rules do not override federal/state/local requirements.
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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