Thanks to a decision by the Federal Housing Administration (FHA), it’s now possible to proceed with transactions that include FHA loans after a new mandatory inspection is completed in “Presidentially-Declared Major Disaster Areas” (PDMDA).

“Once the president officially announces a PDMDA, FHA rules require a home inspection after the disaster has ended to verify the condition of the property,” says Meredith Caruso, manager of member legal communications for Florida Realtors. “This inspection is to take place after the FEMA-declared closing date of the Incident Period. As FEMA hasn’t announced this closing date yet, this waiver allows for inspections to be conducted beginning September 19, 2017, to avoid delays based on this requirement.”

For mortgages that have not closed yet or are pending endorsement, mortgagees must follow the guidance contained in the Single Family Housing Policy Handbook 4000.1 (SF Handbook) Section II.A.7.c, Inspection and Repair Escrow Requirements for Mortgages Pending Closing or Endorsement in Presidentially-Declared Major Disaster Areas.

In general, the mandated post-disaster inspection identifies and quantifies any damage to the dwelling and must be completed by an FHA roster appraiser even if the inspection shows no damage to the property.

FHA says that it created a waiver to the inspection timeline because it believes the situation in Florida has stabilized “to the extent that further damage to properties appears unlikely.” However, mortgagees should continue to monitor FEMA’s website for the latest information.

“Nothing in this waiver affects mortgagees’ obligations to exercise prudent lending practices and ensure the mortgages they submit for endorsement fully comply with FHA’s property eligibility requirements, as well as any property condition requirements related to claims processing,” FHA said in its release.

Realtors need to diligently communicate with all loan officers or underwriters to coordinate required re-inspections to facilitate transactions.

FHA’s waiver that allows earlier Hurricane Irma inspections is posted online.

source: Florida Realtors