An area of concern to real estate agents — and one where I can perform a service for their clients — is that the property itself must be in acceptable condition according to Department of Housing and Urban Development (HUD) guidelines. That’s right: it’s not just the borrower that has to be underwritten, but the property itself. Most HUD requirements for property conditions deal with health and safety. For example, loose handrails are a common issue with FHA loans. If there is a stairway inside the house and the handrails are loose, the FHA-approved appraiser will note that on the appraisal and it will have to be resolved prior to the FHA loan. Therefore, if you are going to request an FHA program, I do a quick check of the property for common issues of non- compliance. I can’t know for sure because I am not an official FHA appraiser, but I can at least look for the most obvious and common problems. I double-check the home using the MLS sheet and property photographs to ensure I don’t see any issues with the property. If there are problem areas, I let the agent and the borrower know so they can resolve them, in the hopes that you can be approved for the loan and move to closing. Sometimes there are several complicating issues going on at once. For instance, if you are buying a bank foreclosure or short sale while the house is in poor shape. If the house is in bad shape and it’s not a normal sale situation, a regular FHA loan is possibly not the right fit for the borrower. You may want to apply for an FHA rehab loan, which will provide additional funds to repair the issues with the house. Another issue that occasionally arises with an FHA loan is when homes are connected to well water and a septic system. In that situation, FHA requires that the well and septic be a minimum distance apart. If the well and septic are not spaced correctly, the underwriter is not going to approve the loan. I point out to
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