March 20, 2013
A reader asks, “My mom is trying to sell her house and when it was built it was on septic. When my parents bought the house in 1988, the neighborhood had been subsidized and city sewer was installed but not to their house that was already there prior to subsidizing.”
“Now to get it on city sewer is gonna cost 13,000 dollars that she doesn’t have. A potential buyer has put a bid on the house and is applying for an FHA insured loan and they are saying it HAS to be hooked to city sewer. Is this correct or does her existing system which is up to codes and works appropriately acceptable?”
The answer to this question may well depend on state or local building codes. In these cases the borrower must consult the local authority to learn what can or must be done. FHA loan requirements are not the only ones which must be observed when applying for an FHA insured mortgage loan–the local and state building codes also apply.
FHA loan rules cannot and do not override building codes.
Instead, the FHA minimum property requirements should be viewed as additional protections and regulations which must be observed in addition to the existing local guidelines. In some cases there may be a waiver, exceptions or other possibilities depending on the circumstances, but again, the borrower must find out what local or state laws apply.
Let’s examine a quote from HUD 4910.1 Minimum Standards For Housing, which says the following:
“The Department of Housing and Urban Development does not assume responsibility for enforcing or determining compliance with local codes and regulations or for making interpretations regarding their application for purposes of the local government. However, if compliance with the provisions of a local code is required in accordance with 24 CFR 200.925 or .926, then the Department is responsible for determining compliance and issuing interpretations for the Department’s purposes.”
For more information on FHA minimum property requirements, contact the FHA directly.
Do you have questions about FHA loans or FHA refinance loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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