FHA Electrical Certification
The Federal Housing Administration, which insures millions of mortgages each year for low- and moderate-income borrowers, requires properties be free of certain deficiencies before insurance endorsement. As an agency within the Department of Housing and Urban Development, FHA must protect HUD's financial interest in homes that secure its insured loans. HUD's safety and durability requirements sometimes call for further inspection and certification of a home's electrical systems.
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Basics
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FHA-approved appraisers inspect homes and must denote any "potential property deficiency that may pose a threat to the safety of the occupants or the security and soundness of the property," according to HUD. The electrical utility must be on at the time of appraisal inspection. The appraiser is responsible for initially determining the adequacy of the home's electrical system. In certain cases, they may request an automatic inspection or repair, called an electrical certification, by a qualified third party.
Identification
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According to HUD, electrical service may be provided to the home by either circuit breakers or fuses. At the time of inspection, the appraiser must examine the electrical box for frayed or exposed wires, which are prohibited and require certification to obtain insurance endorsement. Most houses have a 100- or 200-amp service, according to the Living With My Home website. Nevertheless, FHA does accept 60-amp service if it appears to be adequate amperage for the home's present or standard appliances. The antiquated wiring system known as knob and tube wiring is acceptable if in good condition and the home has at least 60-amp service.
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Requirements
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Appraisers only can require an electrical certification when they cannot determine that the electrical system is adequately working while the utility is on. Individuals qualified to complete certifications for FHA insurance purposes include reputable home inspectors; inspectors from a local building department; FHA compliance inspectors; or professional electricians deemed qualified by the FHA Direct Endorsement underwriter.
Considerations
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Appraisers may not arbitrarily request electrical certification of a home. If the system is new or nearly new and raises no question as to its performance or adequacy, the appraiser must not request re-examination of the electrical system. The lender is responsible for ordering the electrical certification from a reputable, independent and licensed (if required by local code) professional. He must not have an interest in the successful completion of the subject transaction or an "identity of interest" with any party involved in the deal, according to HUD.
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References
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