Five Repair Items To Watch For When Buying A Phoenix Bank Owned Home With FHA Financing

FHA loans comprised a sizable part of the financing used to purchase homes in Greater Phoenix. During the last few years the government subsidized loan has allowed many people to get into home that otherwise would not have a chance. This not only provides an opportunity for these persons, but helps move properties along from distressed in the case of bank owned and short sale home into the hands of new owners, helping, at the same time, the Phoenix real estate market recover from its woes. Many of the homes are in different states of repair.

It is common to find short sale and bank owned homes that need attention that are not move in ready. Many of these are not good candidates for buyers with an FHA loan. The FHA has its own guidelines by which the property being purchased has to abide.

Many lenders offering the FHA loan will require that the home be move in ready. The reason is that most people getting an FHA loan don’t have extra money to go around making repairs, but there are other reasons as well. So here are a few of the many items that need to work for a buyer go obtain FHA financing.

1. Hot water heater strapping - In Arizona hot water heaters installed in a closet must be properly secured so they will not fall over and start a fire and they need to have ample ventilation. More importantly the pressure release valve needs to exit to the exterior and there need to be proper ventilation.

2. All utilities must be on and functioning so that the FHA appraiser can check if it all works. An FHA appraiser will not finalize an appraisal until the water, electric and heat are all working properly in a home. Some vacant bank owned properties will have these turned off, so it is important that listing agents turn them back on after escrow is opened, if they want an FHA buyer to buy the home.

3. All appliances must be in good working order - An oven that is missing or not working will need to be installed or repaired to pass an FHA appraisal inspection. A refrigerator is not necessary.

4. There must be a source for heat in good repair- Air conditioning and heating must work it it’s there and the heat especially must be operable.

5. The Roof must be in good repair - The roof must look water proof and good enough that it does not need immediate repair or replacement.

These are just some of the important factors a home must have in order to qualify for FHA financing.