Buying a home is one of the most important purchases you will make in your lifetime, so you should be sure that the home you want to buy is in good condition. A home inspection is an evaluation of a home’s condition by a trained expert. During a home inspection, a qualified inspector takes an in-depth and impartial look at the property you plan to buy. The inspector will:
The home inspector does not estimate the value of the house.
After the inspection is complete, you will receive a written report of the findings from the home inspector, usually within five to seven days.
This brochure is primarily for homebuyers that buy their homes with the help of the Federal Housing Administration (FHA) mortgage insurance programs. All homebuyers can benefit from the information in this brochure to understand the difference between home inspections and appraisals, the benefits of home inspections, how to find a qualified inspector, and the importance of radon testing.
Home Inspections Are Not Appraisals
A property appraisal is a document that provides an estimate of a property’s market value. Lenders require appraisals on properties prior to loan approval to ensure that the mortgage loan amount is not more than the value of the property. Appraisals are for lenders; home inspections are for buyers.
FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), requires lenders to obtain appraisals of properties securing FHA-insured loans. FHA requires appraisals for three reasons:
The FHA appraisal process will note property deficiencies that are readily observable and found not in compliance with HUD’s minimum property requirements/standards (Handbook 4905.1 REV-1 and Handbook 4910.1). These deficiencies may not be the same as those items noted in a home inspection report.
About FHA Home Inspections
FHA helps individuals and families become homeowners by providing lenders with mortgage insurance for certain loans.
FHA does not guarantee the value or condition of your future home, and FHA does not perform home inspections. If you find problems with your new home after closing, FHA cannot give or lend you money for repairs, nor can it buy the home back from you.
That’s why it is so important for you, the buyer, to get an independent home inspection. Ask a qualified home inspector to thoroughly examine the physical condition of your future home and give you the information you need to make a wise decision.
The Bottom Line: Spending Hundreds May Save Thousands
When you make a written offer on a home, you should insist that the contract state that the offer is contingent on a home inspection conducted by a qualified inspector. You will have to pay for the inspection yourself, but it could keep you from buying a house that will cost you far more in repairs down the road. If you are satisfied with the results of the inspection, then your offer can proceed.
FHA does not guarantee the value or condition of your potential new home, and FHA does not perform home inspections.
Finding a Qualified Home Inspector
As the homebuyer, it is your responsibility to carefully select a qualified inspector and pay for the inspection.
The following sources may help you find a qualified home inspector:
State regulatory authorities. Some states require licensing of home inspectors.
Professional organizations. Professional organizations may require home inspectors to pass tests and meet minimum qualifications before becoming a member. Phone book yellow pages. Look under “Building Inspection Service” or “Home Inspection Service.” The Internet. Search for “Building Inspection Service” or “Home Inspection Service.” Your real estate agent. Most real estate professionals have a list of home inspectors they recommend.
Radon Gas Testing
The U.S. Environmental Protection Agency and the Surgeon General of the United States have recommended that all houses should be tested for radon. For more information on radon testing, call the National Radon Information Line at 1-800-SOS-Radon or 1-800-767-7236. As with a home inspection, if you decide to test for radon, you may do so before signing your contract, or you may do so after signing the contract as long as your contract states the sale of the home depends on your satisfaction with the results of the radon test.
HUD has resources available for information about home-buying and home-ownership. You may find the following services helpful.
www.hud.gov or espanol.hud.gov
HUD’s website contains comprehensive information about home inspections, homebuying, homeownership, selling a home, making home improvements, and other housing-related topics- in English and Spanish.
National Lead Information Clearinghouse
Many homes built before 1978 have lead paint, and some of these have lead hazards. To protect your family, it is recommended that you get a lead-based inspection and/or risk assessment. For more information, contact the National Lead Information Clearinghouse at 1-800-424-LEAD.
HUD-Approved Housing Counseling
HUD supports a network of approved housing counseling agencies that provide counseling services across the nation. For a complete list of HUD-approved agencies in your area, call the toll-free HUD housing counseling referral line 1-800-569-4287 or visit the HUD website at www.hud.gov.
A searchable database of HUD-approved lenders, including banks, mortgage companies, and credit unions, is available on the HUD website at www.hud.gov.