• FHA requires certain repairs for mortgage insurance.tool bag and tools 1 image by Warren Millar from Fotolia.com
  
  The Federal Housing Administration (FHA) insured approximately one-third of the country's mortgages in 2009. As an agency within the Department of Housing and Urban Development (HUD), FHA appraisal guidelines protect HUD's interest in properties that secure FHA-insured loans. An FHA-approved appraiser conducts a physical inspection of the one- to four-unit property to determine whether it meets FHA standards. They must denote any deficiencies, request their correction and re-inspect the property for compliance before FHA will insure the loan.
  
  

Health and Safety

• FHA is concerned with repairs necessary "to protect the health and safety of the occupants," according to FHA Handbook 4150.2, which contains appraisal guidelines. FHA requires the correction of deficiencies that can be fixed without major repairs or alterations. If repair is not feasible, the home is rejected and ineligible for insurance. Hazards include adverse conditions in or around the property that affect occupants' health and safety, the property's structural soundness or impair the use and enjoyment of the property. They may arise from toxic chemicals, radioactive materials, pollution, hazardous activities, soil or ground movements, ground water, inadequate surface drainage, flood or excessive noise nearby, as stated in the Handbook. For example, in new constructions, rock formations and unstable soil or slopes are unacceptable, and the builder must mitigate these deficiencies by providing proof of proper design and construction (through plans) to ensure the home's satisfactory performance. In existing homes where signs of paint failure are present, such as peeling, the appraiser may require the paint's removal and re-painting according to the area's laws for lead-based paint.
  
  

Deferred Maintenance

• The appraiser may denote deferred maintenance -- postponed repairs that are necessary to bring the home up to FHA standards. It requires the replacement of any operable or useful element of the home "that will have reached the end of its useful life within two years," according to the Handbook. Appraisers must use discretion when requesting repairs. A home's old components may function properly despite age; therefore replacement or repair of such items is unnecessary and not required. Some repairs are beyond the scope of appraisers' expertise, or are not readily observable, thus, require a second opinion from a professional that can recommend appropriate repairs. For instance, an appraiser may observe that a septic system shows evidence of failure, but must request an inspection by a septic expert or the local health authority to determine its viability. Also, a roof that shows signs of damage and has a remaining life of less than two years will require repair or replacement.
  
  

Constuctions, Heating, Ventilation, Air Conditioning and Electrical Systems

• FHA requires proper ventilation of structural spaces to reduce the effects of excessive heat and moisture, as they may lead to decay and deterioration. Appraisers must request natural ventilation for attics and crawl spaces. Crawl spaces must also be accessible and have all support beam intact. Stone and brick foundations with significant cracks or signs of erosion in exposed areas may effect structural soundness and require inspection and repair by an expert. Repair is required for roofs that do not cover the entire house, show deteriorating roofing materials, have holes, leaks or missing tiles.Gas, water and electric utilities must be on at the time of inspection so the appraiser can operate mechanical systems. If they observe that items fail to turn on or off, emit warm or cold air, make irregular noises, shut down prematurely, emit sparks, smoke or an irregular smell, or contain frayed or exposed wiring, appraisers will require repairs and re-inspection.