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} HUD s main web site for the latest news on FHA programs www.hud.gov/+a } HUDCLIPS - The source for FHA Policy Documents (Handbooks, Mortgagee LeGers and NoIces) h-p://www.hud.gov/offices/adm/hudclips/index.cfm
} http://portal.hud.gov/ hudportal/hud?src=/ program_offices/housing/ sfh/talk/parc/phiarch FHA- Serving the American Homebuyer Since 1934 1-800-CALL FHA
FHA- Serving the American Homebuyer Since 1934 1-800-CALL FHA
From the Technical Support Branch of the Processing and Underwriting Division, Denver Homeownership Center Ø Terry Caine Ø Jack Luoma FHA- Serving the American Homebuyer Since 1934 1-800-CALL FHA
Santa Ana Denver Atlanta Philadelphia FHA- Serving the American Homebuyer Since 1934 1-800-CALL FHA
} This presentation introduces and explains official policy found in Handbooks and Mortgagee Letters. } If you find a discrepancy between this presentation and policy found in Handbooks, Mortgagee Letters, etc., the official policies prevail. 1-800-CALL FHA
What is an EEM? Allows homeowners to improve the energy efficiency of their home by financing the cost of the improvements into their loan. If the savings in utility costs will more than pay for the costs of the improvement, borrower does not have to qualify for the extra costs of the energy improvements. Who is eligible? New and existing 1-4 units including condominiums and manufactured homes. Purchases, streamline refinances No cash-out refinances, 203(h) disaster loans, and 203(k) rehabilitation mortgages. Homeowners FHA- Serving the American Homebuyer Since 1934 1-800-CALL FHA
How do you apply? Find an EEM lender. Purchase a HERS (Home Energy Rating Systems) Report from a home energy professional. Qualify for the base mortgage before the energy efficient improvements are added. No second appraisal is needed to support added costs. FHA- Serving the American Homebuyer Since 1934 1-800-CALL FHA
Want More Information? See Mortgagee Letters: ML 2009-18 ML 2005-21 ML 1995-46 ML 1993-13 See HUD Handbook 4155.1 6.D.1 Department of Energy s website: http://www.energystar.gov/index.cfm? c=home_improvement.hm_improvement_contractors#s1 FHA- Serving the American Homebuyer Since 1934 1-800-CALL FHA
FHA- Serving the American Homebuyer Since 1934 1-800-CALL FHA
Ø Minimum Property Requirements for existing properties Ø Resources Ø Answer your questions
Ø 4905.1 REV 1 (3/91) MPR Existing 1-4 family units Ø 4150.2 - Single Family One - to Four- Unit Dwellings Ø Mortgagee Letter 05-48 FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
The requirements in the 4905.1Handbook together with appropriate administrative rules and regulations constitute the minimum acceptable criteria for eligibility of existing properties.
Enforcing, interpreting, or determining compliance with local codes and regulations is the responsibility of local authorities not appraisers, however appraisers should look for signs of failure or faulty construction.
Real Estate Entity: Ø Property must comprise of a single, readily marketable real estate entity. Ø If the property consists of multiple lots with separate tax account numbers, the lots must be in the same ownership and encumbered under the same deed.
Party or Lot Line Wall: A building constructed on or to a property line must be separated from the adjoining building, by a wall extending the full height of the building from the foundation to the ridge of the roof.
Detached Units
Multiple units on one lot
Access: Ø Each property must be provided with a safe and adequate pedestrian or vehicular access from a public or private street. FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Access: Ø Access to the living unit must be provided without passing through any other living unit. Ø Access to the rear yard must be provided without passing through any other living unit. For a rowtype dwelling, the access may be by means of alley, easement, passage through the dwelling, or other acceptable means.
All living units must contain the following: Ø A continuing supply of safe and potable water. Ø Sanitary facilities and a safe method of sewage disposal. Ø Domestic hot water. Ø Electricity for lighting and for equipment used in the living unit. Electricity can be generator or solar powered, if there is a back-up system.
All living units must contain: Ø Heating adequate for healthful and comfortable living conditions. Ø All non-conventional heating systems, such as space heaters and others must comply with local jurisdictional guidelines. Ø The Field Office may determine that climatic conditions are such that mechanical heating is not required.
Does this meet MPR s?
When is solar heating acceptable for insuring?
Is a wood pellet burning fireplace considered to be an acceptable conventional heating system?
} Heats the living area of the home to a minimum of 50 degrees. } The unit is permanently installed, safe to operate and provides comfortable heat. } Relies upon a fuel source that is readily obtainable within the subject s geographic area. } There is market acceptance } Operates without human intervention for extended periods of time. } Is in compliance with all local codes and regulations
Utilities Individual water supply and sewage disposal Systems require the following: Water 1. Water quality must meet the requirements of the health authority having jurisdiction. If the local authority does not have specific requirements, the maximum contaminant levels established by the Environmental Protection Agency (EPA) shall apply.
Utilities require the following: 2. Location of wells for HUD-insured properties must comply with the requirements established in the 24 CFR 200.926d(f)(3) or HUD Handbook 4150.2
Source of pollution Minimum horizontal distance (feet) Property Line 10 (EP*) Septic Tank 50 Absorption (Drain) Field (SUP1) 100 (EP*) Seepage Pit (SUP1) 100 Absorption Bed (SUP1) 100 Sewer Lines with Permanent Watertight Joints 10 Other Sewer Line 50 Chemically Poisoned Soil (SUP3) 25 Dry Well 50 Other (SUP2) -------------------------------------------------------------------------------------------- Asterisk = Existing Properties SUP# = Supplemental Requirements EP=See ML 2002-25
Utilities require the following: 3. If the authority is unable to perform the water quality analysis in a timely manner, a private, commercial testing laboratory or a licensed sanitary engineer acceptable to the authority may take and test water samples.
Utilities Individual sewer: Each living unit must be provided with a sewage disposal system adequate to dispose of all domestic wastes in a manner which will not create a nuisance, or in any way endanger the public health.
Utilities Sewer: Individual pit privies are permitted where such facilities are customary and are the only feasible means of waste disposal, provided they are installed in accordance with the recommendations of the local Department of Health or, in the absence of such recommendations, with the requirements of the U.S. Public Health publication, "Individual Sewage- Disposal systems.".
Utilities Sewer: Connection must be made to a public or community water/sewage disposal system whenever feasible.
Nonresidential Use Design Limitations: Any nonresidential use of the property shall be subordinate to its residential use and character. A property, any portion of which is designed or used for nonresidential purposes, is eligible only if the type or extent of the nonresidential use does not impair the residential character of the property. FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Nonresidential Use: Areas designed or used for nonresidential purposes shall not exceed 25 percent of the total floor area. Storage areas or similar spaces which are integral parts of the nonresidential portion shall be included in the total nonresidential area. FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Real estate office added on portion of ground level
Nonresidential Use, 203k: For 203k appraisals areas designed or used for nonresidential purposes shall not exceed 25 percent of the total floor area for one story structures, 49% for two story and 33% for three story. FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Defective Conditions: Defective construction, poor workmanship, evidence of continuing settlement, excessive dampness, leakage, decay, termites, or other conditions impairing the safety, sanitation or structural soundness of the dwelling shall render the property unacceptable until the defects or conditions have been remedied and the probability of further damage eliminated. FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Unacceptable conditions
Question? Does FHA require bedrooms in a home? 1-800-CALL FHA
Question? Does FHA require that a bedroom have a closet? 1-800-CALL FHA
Each living unit must have the space necessary to ensure suitable living, sleeping, cooking and Dining accommodations and sanitation facilities.
All bedrooms must have adequate egress to the exterior of the home. If an enclosed patio (solid walls) covers the bedroom window, it is possible that the bedroom won't qualify as a habitable bedroom. Security bars are acceptable if they comply with local fire codes. Occupants of a bedroom must be able to exit the home if there is a fire.
Mechanical systems must be safe to operate, be protected from destructive elements, have reasonable future utility, durability and economy, and have adequate capacity and quality. FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Ventilation: Natural ventilation of structural space such as attics and crawl spaces, must be provided to reduce the effect of conditions of excess heat and moisture which are conducive to decay and deterioration of the structure. FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Roof covering must prevent entrance of moisture and provide reasonable future utility, durability and economy of maintenance.
FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
When reroofing is needed for a defective roof, already consisting of three layers of shingles, all old shingles must be removed prior to reroofing.
Hazards: The property must be free of hazards which may adversely affect the health and safety of the occupants or the structural soundness of the improvements, or which may impair the customary use and enjoyment of the property by the occupants. The hazards can be subsidence, flood, erosion, defective lead base paint (24 CFR Part 35) or the like. FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Ø If unclear as to the severity of the condition, report it, and submit the completed report Ø The lender is responsible to clear the condition Ø The lender decides whether to accept the property FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Crawl Space: In order to insure against conditions which could cause deterioration to the building and seriously affect the marketability of the property, it is required that: Ø A. There must be adequate access to the crawl space. Ø B. The floor joists must be sufficiently above the highest level of the ground to provide access for maintenance and repair of ductwork and plumbing. Ø The GUIDELINE for crawl space is 18 inches. FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Ø C. The crawl space must be properly vented. Ø D. Any excessive dampness or pooling of water in the crawl space must be corrected. FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
What should the appraiser check for when inspecting the crawl space or slab? Blocked or inadequate access Space adequate for maintenance and repair (recommended 18 inches) Support beams not intact Dampness or ponding of water Adequate ventilation SLAB Cracks that could affect structural soundness FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Drainage: The site must be graded to provide positive, rapid drainage away from the perimeter walls of the dwelling and prevent pooling of water on the site. HUD does not require gutters and downspouts, if the subject property is experiencing damage to the foundation because of a lack of gutters and downspouts, the appraiser should address in the report. FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Site Problem/Foundation Problem FHA- Serving the American Homebuyer Since 1934" 1-800-CALL FHA
Have your expecta>ons been met? Unanswered Ques>ons? www.hud.gov 800- CALLFHA (800-225- 5342) E- Mail: answers@hud.gov Knowledge Base: www.hud.gov/answers 1-800-CALL FHA FHA- Serving the American Homebuyer Since 1934
Watch For Changes Check for the latest information at www.hud.gov Get on E- Mail List listserv@hudlist.hud.gov 1-800-CALL FHA FHA- Serving the American Homebuyer Since 1934"