The FHA 203(b) Loan Program - STM Partners

New Construction, Continued
General
Requirements,
(continued)
Inspection
Requirements
Builder
Approval: HUD
No Longer
Approves
Builders
• Properties built in an airport runway clear zone are not eligible for new
construction FHA loans.
• A certification must be provided on form HUD-92900-A, page 3, which states that
the property is 100% complete at the time of loan closing (both on site and off
site improvements) and the property meets HUD’s minimum property standards.
Documentation must be provided to verify completion of the property (i.e.,
appraisal, Certificate of Occupancy, and final inspection from the original
appraiser – as applicable for the type of new construction).
• SunTrust requires a final inspection from the original appraiser on proposed or
under construction properties, even with a Building Permit and Certificate of
Occupancy issued prior to closing. If a Certificate of Occupancy, or its
equivalent, was not issued, then a HUD fee inspector must issue the final
inspection.
• When a property is considered “existing construction” and there are no repairs or
corrections conditions noted by the appraiser, the appraisal serves as final
inspection. For new construction “existing” appraisals to serve as a final
inspection the following requirements apply:
• the appraisal must state that the property was built in accordance with the
submitted plans and specs and grading and drainage are adequate, and
• the appraisal may not be made “subject to completion per plans and
specifications.”
• In all cases, without exception, the builder must provide a one (1) year builder’s
warranty as provided on Form HUD-92544.
References:
• See Comprehensive Valuation Package (CVP) Requirements in the topic
Appraisal Requirements for additional information.
• See Closing Documentation in the Application, Disclosures and Consumer
Compliance topic for additional new construction forms.
See Repair and Inspection Requirements in the Appraisal Requirements topic for
information regarding when an appraisal is made “As Is” or “Subject to” one of the
following categories:
• Completion per Plans and Specifications,
• Repairs and Alterations, or
• Required Inspections.
HUD no longer approves builders nor maintains a list of approved builders.
Continued on next page
Section 2.22 July 27, 2012
FHA 203(b) Loan Program Page 28 of 217
Correspondent Seller Guide