FHA Guidelines & Requirements 2 — Questions and Answers
Question 1: Under FHA guidelines, what is the minimum required remaining economic life for a property to be eligible for an FHA-insured mortgage?
- 10 years
- At least as long as the loan term (Correct answer)
- 25 years
- 30 years
Correct answer: At least as long as the loan term
FHA requires the property's remaining economic life to be at least as long as the loan repayment period.
Question 2: When appraising a property with a wood-burning fireplace for FHA purposes, the appraiser must:
- Require a certified chimney inspection in all cases
- Note the fireplace but no inspection is required unless deficiencies are visible (Correct answer)
- Exclude the fireplace value from the appraisal
- Require the seller to decommission the fireplace
Correct answer: Note the fireplace but no inspection is required unless deficiencies are visible
FHA appraisers note fireplaces and recommend inspection only if visible deficiencies are observed.
Question 3: Which condition related to drainage would cause an FHA appraiser to flag a property as not meeting Minimum Property Requirements?
- A sloped backyard that drains away from the foundation
- Standing water pooling against the foundation after rain (Correct answer)
- A French drain installed along the property perimeter
- A sump pump in the basement that is functional
Correct answer: Standing water pooling against the foundation after rain
Standing water pooling against the foundation indicates inadequate drainage, which is an MPR deficiency.
Question 4: For FHA appraisals, how must an appraiser handle a property where the bedroom lacks a window to the exterior?
- Approve it if the room has an interior ventilation fan
- Cite it as an MPR deficiency because bedrooms must have egress windows (Correct answer)
- Ignore it if local building codes permit it
- Deduct 5% from the appraised value
Correct answer: Cite it as an MPR deficiency because bedrooms must have egress windows
FHA MPRs require bedrooms to have at least one window to the exterior for light, ventilation, and egress.
Question 5: What is the FHA appraiser's responsibility regarding a property's roof condition?
- Require a full roof replacement if the roof is over 10 years old
- Estimate the remaining useful life and flag if less than 2 years remain (Correct answer)
- Always require a roofing contractor's report
- Only comment on the roof if the interior shows water damage
Correct answer: Estimate the remaining useful life and flag if less than 2 years remain
FHA appraisers must estimate remaining roof life and require repair or replacement if less than 2 years of life remain.
Question 6: Under HUD guidelines, an FHA appraisal assignment must be completed by:
- Any licensed real estate agent with appraisal training
- A state-certified or state-licensed appraiser on HUD's FHA Roster (Correct answer)
- A HUD-employed staff appraiser only
- Any USPAP-compliant appraiser regardless of roster status
Correct answer: A state-certified or state-licensed appraiser on HUD's FHA Roster
Only appraisers listed on HUD's FHA Roster—who are state-certified or licensed—may complete FHA appraisals.
Question 7: If an FHA appraiser observes evidence of prior methamphetamine manufacturing in a property, what is the required action?
- Note it in the addendum but assign no value impact
- Flag it as a health and safety issue requiring remediation before FHA financing (Correct answer)
- Contact local law enforcement before completing the appraisal
- Ignore it if the seller discloses the prior use
Correct answer: Flag it as a health and safety issue requiring remediation before FHA financing
Meth contamination is a health and safety hazard; FHA requires documented remediation before the property is eligible for FHA financing.
FHA Guidelines & Requirements 2
Under FHA guidelines, what is the minimum required remaining economic life for a property to be eligible for an FHA-insured mortgage?