FHA Risk Assessment & Mitigation 3

Question 1

Under FHA guidelines, what minimum remaining economic life must a property have relative to the mortgage term?

Accepted Answer

The remaining economic life must equal or exceed the mortgage term

Answer

FHA requires the appraiser to estimate remaining economic life and confirm it is at least equal to the mortgage term to ensure the collateral will support the loan.

Question 2

When appraising a manufactured home for FHA financing, which foundation requirement must be met?

Accepted Answer

The home must be on a permanent foundation per the HUD Permanent Foundations Guide for Manufactured Housing

Answer

FHA requires manufactured homes to be on a permanent foundation that meets HUD's Permanent Foundations Guide, and an engineer certification is typically required.

Question 3

An appraiser discovers that a property is located within 300 feet of a former dry-cleaning facility. What risk must be considered?

Accepted Answer

Soil and groundwater contamination from dry-cleaning solvents such as PCE/TCE

Answer

Dry-cleaning facilities commonly use perchloroethylene (PCE) and other chlorinated solvents that can contaminate soil and groundwater, posing environmental and health risks.

Question 4

What is the FHA appraiser's responsibility when a property has a private well as the sole water source?

Accepted Answer

Require water quality testing that meets EPA safe drinking water standards unless waived by the lender

Answer

FHA requires water quality testing for private wells to ensure the water meets EPA standards for potability, protecting the health of future occupants.

Question 5

How should an FHA appraiser handle a property where the septic system was recently pumped but shows signs of failure such as surfacing effluent?

Accepted Answer

Flag the system as a required repair and recommend inspection by a licensed septic professional

Answer

Surfacing effluent is a clear sign of septic failure; FHA requires the system to be functional, and a professional inspection must be completed before closing.

(FHA) Federal Housing Administration Appraiser Certification Practice Test

(FHA) Federal Housing Administration Appraiser Certification Practice Test

FHA Risk Assessment & Mitigation 3