September 18, 2014
A reader asks, “I am trying to purchase a home with an FHA loan. The central air in the house I’m trying to purchase is not working, however, the owner has window units in each room. They all work and cool the house very nicely. I was planning on replacing the central air after purchasing the home. I’ve been told the house will not qualify because the central air is not working. Won’t the window units suffice as meeting the minimum standards of living?”
One interpretation of the FHA minimum property standards in this situation would be that it’s not the presence of the window units in the home that would be the issue, but rather than an installed appliance/system in the home is not functioning properly.
The home may well be livable, but that isn’t always the reason why a certain condition might be unacceptable to the appraiser or the local authority.
A non-functioning central air system may be viewed by the FHA appraiser as a defective condition. State or local building code may have input on the central air system in the home so it’s not a simple case of what’s covered by FHA minimum property requirements. That is an important factor to keep in mind here-FHA minimums are just that, the minimum standard required.
Other regulations outside FHA loan rules can and often do apply.
That’s something we encounter a great deal with certain types of reader questions here–some mistakenly assume that if a situation isn’t addressed by FHA loan program rules, there are no other laws or guidelines that may apply. “I don’t see anything in the FHA loan rules that addresses situation ABC, so why am I being told XYZ?”
The fact is, Federal, State, or local laws can and do have a say in home loan transactions and FHA loan rules are not the only ones at work–borrowers may need to discuss a situation like the one mentioned in the reader question with a local authority such as a real estate agent, home inspector or compliance inspector.
Do you have questions about FHA home 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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