FHA FHA Property Inspection & Condition Assessment 2 — Questions and Answers
Question 1: When appraising an FHA property, which utility systems must be 'on' and operational for the appraiser to complete the inspection?
- Only heating and electrical
- All utilities including gas, electric, water, and heating (Correct answer)
- Water and electrical only
- Only systems visible from the exterior
Correct answer: All utilities including gas, electric, water, and heating
FHA requires all utilities—gas, electric, water, and heating—to be operational at the time of the appraisal so the appraiser can test and observe them.
Question 2: An FHA appraiser notices standing water in the crawl space. What is the appropriate response?
- Photograph it and note it as a minor issue
- Call it out as a repair requirement and note the potential for moisture-related damage (Correct answer)
- Ignore it if the rest of the property is in good condition
- Defer the inspection until the water drains
Correct answer: Call it out as a repair requirement and note the potential for moisture-related damage
Standing water in a crawl space is a health and safety concern that must be cited as a repair requirement and noted for its potential to cause structural and moisture damage.
Question 3: What is the FHA appraiser's responsibility when they observe evidence of active termite infestation?
- Note it in the report and recommend a pest inspection
- Require a certified pest control inspection and report before value can be supported (Correct answer)
- Reduce the appraised value and move on
- Only report it if visible damage is extensive
Correct answer: Require a certified pest control inspection and report before value can be supported
FHA requires a certified wood-destroying insect (WDI) inspection when evidence of active infestation is observed, and any damage must be addressed before the appraisal can be completed.
Question 4: For FHA purposes, how must an appraiser handle a property where the garage has been converted to living space without permits?
- Include it in GLA if it looks finished
- Exclude it from GLA and note any impact on value and safety (Correct answer)
- Only exclude it if local zoning prohibits the conversion
- Treat it the same as any other finished living space
Correct answer: Exclude it from GLA and note any impact on value and safety
Unpermitted converted garage space must be excluded from GLA and the appraiser must comment on any value, safety, or marketability impacts.
Question 5: Which of the following is NOT a Minimum Property Requirement (MPR) under FHA guidelines?
- Safe and potable water supply
- Adequate sewage disposal
- A two-car garage (Correct answer)
- Adequate heating for the climate
Correct answer: A two-car garage
A two-car garage is not an FHA Minimum Property Requirement; FHA MPRs focus on health, safety, and soundness rather than amenity preferences.
Question 6: An FHA appraiser finds that a property's electrical panel has double-tapped breakers. What action is required?
- Note it as informational only
- Require correction by a licensed electrician before closing (Correct answer)
- Ignore it if the home otherwise meets FHA standards
- Only report it if it affects comparable sales
Correct answer: Require correction by a licensed electrician before closing
Double-tapped breakers are an electrical safety deficiency that FHA requires to be corrected by a licensed electrician before loan closing.
FHA FHA Property Inspection & Condition Assessment 2
When appraising an FHA property, which utility systems must be 'on' and operational for the appraiser to complete the inspection?