USDA and FHA loans are becoming more and more popular due to their low down payment requirement, which are 0 percent and 3.5 percent, respectively.
With the added benefit of a lower down payment comes higher standards by which banks are held to in order to loan a buyer the money. Certain aspects of a home have to meet specific criteria in order for a home to meet the guidelines to qualify for a USDA or FHA loan. Here is a list of common inspection problems. By taking care of these before you list your house, you will be making it available for more buyers and setting yourself up to get the highest price possible.
Peeling paint. Interior and exterior must be free of peeling paint, especially dwellings built before 1978 which could contain lead-based paint. However, make sure windows are not painted shut. All windows must be functional.
Shingles. Roofs must be in acceptable condition and have a useful remaining life in excess of two years, and can have no more than three layers.
Utilities. All must be turned on at time of inspection and be properly functioning. Electrical boxes need to be covered and there can be no loose wires. There can be no water leaks. All rooms must have venting from the furnace/AC.
Steps/decks/landings. There must be railings, handrails or fall protection on raised surfaces 2’ above ground or floor level. Uneven steps are not acceptable.
Lack of access. Crawl-spaces and attics must be able to be viewed with “head and shoulder” access. Neither can have excess debris or excessive moisture. Attics must be ventilated.
Significant cracks. Foundations, floors, walls and ceilings must be structurally sound, without significant movement.
Drainage. A positive slope away from the perimeter of the house is required.
Insect infestations. Any sign of damage to a structure, or rotting components must be replaced.
Other safety concerns. This may include inoperable doors either to the house or garage, including the overhead door. Overhead door must reverse upon premature impact. Dead trees, if posing a threat to the house, could be an issue.
If your house is found to have any of these problems, it will not qualify for FHA/USDA financing and you will lose a large portion or your buying population. By going through your home and taking care of these items, you will be taking the necessary steps needed to ensure a smooth transaction.
Information provided by Adam Van Lin, Nevitt Real Estate, 702 First Ave., Perry, 515-465-2200, www.perryiowahomes.com.