FHA Appraisal Inspections Revisited- Crawlspace and Peeling Paint Under The Spotlight

FHA inspections encompass various items that must be inspected to qualify a home for financing by HUD (Housing and Urban Development).  Two common items I wanted to discuss today are the crawlspace and peeling paint.  For those homes with a crawlspace the home must be inspected for the presence of water that may be collecting beneath the house.  Moisture under the house can cause wood rot as well as the build up of mold and mildew.

While some small amounts of water may be present at various times it cannot collect there and sit for an extended period.  There must be venting to the outside so that small amounts can have a chance to evaporate.  HUD use to require that a vapor barrier (plastic sheet) be present, however in recent years this is no longer required.

I have covered peeling paint in a previous post but found this to be a very popular search topic within my blog so I thought I would touch on this subject again.  I am also providing a link to the HUD website regarding lead based paint.  This will provide the most up to date requirements for the removal of lead based paint.  The EPA (Environmental Protection Agency) has very strict guidelines regarding the removal and disposal of lead based paint.  This is especially true for property owners and landlords who do not live in the property but rent it.  The exact procedures they are required to follow are at the link above.

Owner occupied properties are exempt from the EPA rule regarding the method of removal, although it still must be removed.  They are encouraged to learn about the correct procedures.  Contractors who do this type of work must be certified.  When the lead paint has been removed from non owner occupied units the person removing the paint must provide a copy of their EPA certificate that qualifies them to do this work.  Owners that removed paint from their own home must provide a letter stating that they did the work and an inspection letter that verifies the work was done.  FHA appraisers and inspectors can provide the inspection report, however this report only verifies that the work has been done, not actual compliance with the law.  Have you ever had any experience with required FHA repairs?

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on facebook.


  1. Shellie Zollin says

    Hi Tom,

    I am working with a lender to refinance my 1921 house. The reason I need the loan is to fix paint my house, add new floors and retire in 15 years. I have a VA Appraiser coming out in 2 weeks and a contractor making only repairs that I can afford – which isn’t much and why I needed the refinance. Now, I’m about in tears because while we had enough money to primer the house, I can’t afford to paint it until I have more money. If the paint is scraped and primered only, what will the outcome be from the lender. Complete fail or adjust the value on the home. If I would have known this from the start with my lender, I would have never planned this out losing money, with such short notice. I am not selling. Just refinancing. Scared and a bit disappointed.

    • Hi Shellie. I don’t do VA appraisals but I believe they are similar to FHA in some respects. You may want to check with them to see if they have a rehab. loan similar to an FHA 203K where the money you are borrowing is used to fix up your house. If not I would at least tell the bank what is going on so they understand that you need to the money to fix up your house. They may lend you the money and then give you the loan proceeds in an escrow for you to do the work on your home. Depending on whether they have this type of loan product they may allow the appraiser to appraise it subject to the work being done so they know the value it will be when the work is finished. Good luck.

  2. Great video, Tom! I had a home in California with a rusty railing just like that. After ignoring it for years, I found a guy to scrape and paint it and he was done in less than a day. Why did I wait so long???

    It’s well worth the time to just fix it and re-paint with a good paint made for covering formerly-rusted metal surfaces.

    • Thanks, Alison. I think you are right, some of these FHA conditions can be fixed quickly, and it’s better to do it before you list your house so it doen’t hold up the closing.

  3. Hi Tom,
    Great Video! Very informative and of great value to locals on FHA questions. Thank you for sharing!

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