FHA Environmental Hazards & Site Conditions

Question 1

Under FHA guidelines, when must an appraiser identify and flag defective paint in a pre-1978 home?

Accepted Answer

Whenever paint is peeling, chipping, flaking, or otherwise defective on any surface

Answer

Only if the paint is flaking on exterior surfaces

Answer

Only in rooms occupied by children under age six

Answer

Only if the peeling area exceeds one square foot

Question 2

What is the minimum required distance between a private well and a septic tank under FHA Minimum Property Requirements (MPR)?

Accepted Answer

50 feet

Answer

25 feet

Answer

75 feet

Answer

100 feet

Question 3

A property is located in FEMA Flood Zone AE. What must an FHA appraiser note in the appraisal report?

Accepted Answer

That the property is in a Special Flood Hazard Area and NFIP flood insurance will be required as a condition of FHA financing

Answer

Nothing, as flood zones do not affect FHA loan eligibility

Answer

That the property is automatically ineligible for FHA financing

Answer

Only the flood zone designation with no further comment required

Question 4

When an FHA appraiser observes friable asbestos-containing materials (ACM) in a home, what is the appropriate course of action?

Accepted Answer

Note the condition in the report and require remediation by a licensed professional before loan closing

Answer

Ignore it, as intact asbestos does not affect FHA eligibility regardless of condition

Answer

Report it only if the ACM covers more than 10 square feet of surface area

Answer

Recommend the buyer negotiate a lower purchase price to offset future remediation costs

Question 5

Which condition related to underground storage tanks (USTs) requires an FHA appraiser to flag a property for further environmental review?

Accepted Answer

Observable evidence of a current or former UST on the subject property or within approximately 300 feet

Answer

Any aboveground fuel tank over 250 gallons

Answer

USTs only if they are actively leaking at the time of inspection

Answer

Any UST regardless of distance from the subject property

Question 6

What is the FHA appraiser's primary responsibility when a property is located in a high-radon-potential zone?

Accepted Answer

Note the high-radon-potential designation and recommend radon testing by a qualified specialist if appropriate

Answer

Conduct personal radon air testing with a certified test kit

Answer

Require a radon mitigation system be installed in all homes in the zone

Answer

Automatically condition the appraisal on radon mitigation for all pre-1980 homes

Question 7

A pre-1978 home has lead-based paint that is intact, well-adhered, and shows no visible deterioration. Under FHA guidelines, what action is required?

Accepted Answer

Note the potential presence of LBP but require no repair action if the paint is not defective

Answer

Require immediate removal of all lead-based paint regardless of condition

Answer

Reject the property as ineligible for FHA financing due to the age of the home

Answer

Require a full lead paint inspection by an EPA-certified inspector