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# What FHA Repair Requirements Actually Say Here's what we found: The FHA handbook identifies repairs and rehabilitation that must be completed and properly documented before a property becomes eligible for FHA insurance, and it requires inspections to verify that work. The Fannie Mae appraisal completion report then tracks each repair item individually — noting its location (like kitchen or bathroom), whether it affects structural soundness, and whether it was actually finished by the time of the follow-up inspection, with photos required for every repair whether done or not. The passages don't spell out *which specific* defects require repair or what minimum standards must be met; they only show the framework for tracking and documenting repairs that have already been identified. Straight from HUD/FHA Single Family Handbook 4000.1, Fannie Mae Selling Guide, and UAD 3.6/URAR — nothing added.

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© Copyright Notice: © Fannie Mae. UAD 3.6 / URAR reference materials shown for research and reference only. Full documents available at fanniemae.com/uad. Reproduction restricted per Fannie Mae copyright policy.

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#1 HUD/FHA Single Family Handbook 4000.1 Page 1818

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Appendix 8.0 – FHA Defect Taxonomy (11/10/2026) Handbook 4000.1 1793 Last Revised: 8/12/2026 Defect Area 5 Property Eligibility (PE) Minimum property acceptability and eligibility…

HUD/FHA Single Family Handbook 4000.1 · HUD_FHA_4000.1.pdf · Page 1818 · View at official source (HUD.gov — SFH Handbook 4000.1) →

Appendix 8.0 – FHA Defect Taxonomy (11/10/2026) Handbook 4000.1 1793 Last Revised: 8/12/2026 Defect Area 5 Property Eligibility (PE) Minimum property acceptability and eligibility standards for FHA insurance, including program and product-specific variations. HUD Policy References – Handbook 4000.1 Forward HECM Property Eligibility and Acceptability Criteria Legal Restrictions on Conveyance (Free Assumability) Property Acceptability Criteria Mortgagee Closing Requirements Inspection and Repair Escrow Requirements for Mortgages Pending Closing or Endorsement in Presidentially-Declared Major Disaster Areas Programs and Products Application of Minimum Property Requirements and Minimum Property Standards by Construction Status Minimum Property Requirements and Minimum Property Standards Property Acceptability Criteria Inspection and Repair Requirements for HECMs Pending Endorsement in Presidentially-Declared Major Disaster Areas HECM For Purchase Condominiums Application of Minimum Property Requirements and Minimum Property Standards by Construction Status Minimum Property Requirements and Minimum Property Standards Sources 1. Property Acceptability and/or Eligibility 2. Minimum Property Requirements / Minimum Property Standards 3. Flood Certification and/or Special Flood Hazard Area Requirements 4. Manufactured Housing 5. Legal Restrictions on Conveyance (Free Assumability) 6. Property Ownership and/or Transfer History 7. Condo – Project Approval or Loan Level Certifications 8. Program & Product Specific Property Eligibility Requirements 9. Presidentially Declared Major Disaster Area Requirements 10. Other Property Eligibility Issues Causes A. Missing, illegible, or incomplete documentation to support acceptability or eligibility B. Unallowable Property Type, Use, and/or Zoning C. Repairs or Rehabilitation not complete and/or inspections not properly documented D. Restrictions on Resales/Flipping and/or owner of record requirements not met F. Evidence of Fraud or Misrepresentation

#2 HUD/FHA Single Family Handbook 4000.1 Page 718

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B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 693 Last Revised: 8/12/2026 xiii. Inspection and Repair Requirements for HECMs Pending Closing in…

HUD/FHA Single Family Handbook 4000.1 · HUD_FHA_4000.1.pdf · Page 718 · View at official source (HUD.gov — SFH Handbook 4000.1) →

B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 693 Last Revised: 8/12/2026 xiii. Inspection and Repair Requirements for HECMs Pending Closing in Presidentially-Declared Major Disaster Areas (A) Standard All Properties with HECMs pending closing in areas under a Presidentially-Declared Major Disaster Area (PDMDA) designated for individual assistance must have an onsite damage inspection report that identifies and quantifies any dwelling damage, which includes interior and exterior photographs. The damage inspection report must be completed by an FHA Roster Appraiser even if the inspection shows no damage to the Property, and the report must be dated after the Incident Period (as defined by FEMA) or 14 Days from the Incident Period start date, whichever is earlier. The Appraiser may, at their discretion, perform a Remote Observation of the Property. If the effective date of the appraisal is on or after the date required above for an inspection, a separate damage inspection report is not necessary. FHA does not require the Appraiser to ensure utilities are on at the time of this inspection if they have not yet been restored for the area. Damage inspections may be completed by any FHA Roster Appraiser in good standing with geographic competence in the affected market. If the Mortgagee uses a different Appraiser than the Appraiser that did the original inspection of the Property, the Appraiser performing the damage inspection must be provided with a complete copy of the original appraisal. All damages must be repaired by licensed contractors or according to local jurisdictional requirements. All damages, regardless of amount, must be repaired and the Property restored to pre-loss condition with appropriate and applicable documentation. Based on the damage amount, repairs may be: • completed prior to closing; or • completed after closing provided that required repairs are included in a Repair Rider, if sufficient funds are available for a Repair Set-Aside, and repair costs do not exceed permissible thresholds. See Pending HECM Closing table. For HECM for Purchase transactions, see the Inspection and Repair Requirements for HECMs Pending Closing in Presidentially-Declared Major Disaster Areas section in the HECM for Purchase product sheet. (B) Required Documentation Mortgagees must include the damage inspection report in the case binder for all Properties. The following table shows additional required documentation based on the extent of damages.

#3 Fannie Mae Selling Guide Page 1151

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Losses, damages, penalties, settlements, liabilities, judgments, claims, counterclaims, defenses, actions, costs, expenses, attorneys' fees, and other legal fees (collectively,…

Fannie Mae Selling Guide · Selling Guide - 06-03-2026.pdf · Page 1151 · View at official source (selling-guide.fanniemae.com) →

Losses, damages, penalties, settlements, liabilities, judgments, claims, counterclaims, defenses, actions, costs, expenses, attorneys' fees, and other legal fees (collectively, “Fannie Mae losses” or “losses incurred by Fannie Mae”). Fannie Majors See multiple pool. Federal Emergency Management Agency (FEMA-Declared Disaster Areas) A city, county, or parish designated by FEMA as eligible for individual assistance as a result of a natural disaster. Federal Emergency Management Agency (FEMA) A federal agency that provides assistance in areas that have suffered a major disaster or other emergency. It also maintains flood insurance rate maps that identify the Special Flood Hazard Areas in which Fannie Mae requires flood insurance. Federal Housing Administration (FHA) FHA, also a part of HUD, provides mortgage insurance on loans made by FHA-approved lenders. Federal Housing Finance Agency (FHFA) The safety, soundness, and mission regulator for Fannie Mae. FHFA replaced the former regulator, the Office of Federal Housing Enterprise Oversight (OFHEO). fee simple estate An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condo project, the unit owner is the exclusive owner only of the air space within their portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property. FEMA Federal Emergency Management Agency FHA Federal Housing Administration FHA-insured mortgage A mortgage by the FHA; may be referred to as a "government" mortgage. FHFA Federal Housing Finance Agency FHLMC Federal Home Loan Mortgage Corporation fidelity bond

#4 UAD 3.6 / URAR (FNMA) Page 14

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Itemized List of Repairs Appendix F-3: Completion Report Reference Guide Page 15 of 34 Version 1.4 03 Itemized List of Repairs The Itemized List of Repairs section displays a list…

UAD 3.6 / URAR (FNMA) · appendix-f-3-completion-report-reference-guide.pdf · Page 14 · View at official source (fanniemae.com/uad) →

Itemized List of Repairs Appendix F-3: Completion Report Reference Guide Page 15 of 34 Version 1.4 03 Itemized List of Repairs The Itemized List of Repairs section displays a list of individual repairs required in the original appraisal, and their status as of the date of the completion inspection. If there were no repairs in the original appraisal, this section does not display. Completion Report - Itemized List of Repairs Report Field ID Report Label When to Include Allowable Answers / Format Definition / Additional Guidance 03.001 Feature Required for each repair item Choose an allowable answer from the Definition / Additional Guidance column • Exterior Walls and Trim • Flooring • Foundation • Mechanical System • Roof • Walls and Ceiling • Windows • Other (Describe) See iGuide N/A Required for each repair item Photo or image Photos or images for the repair item (whether repair completed or not) must be provided, which display in Completion Report Exhibits as “Itemized List of Repairs” with the indicated Feature. A caption may be provided to further describe the photo. 03.002 Location Required for each repair item Choose an allowable answer from the Definition / Additional Guidance column • Full Bathroom • Half Bathroom • Kitchen • Other (Describe) If there are multiple kitchens or bathrooms, indicate in Description which one has the repair item. 03.003 Description Required for each repair item Free-form Description of the original defect, damage, or deficiency, including details as to location if needed. • For properties with more than one unit, indicate in Description which unit has the repair item. • For properties with multiple dwellings, indicate in Description which building has the repair item. • For outbuildings, indicate in Description the Outbuilding Type that has the repair item. 03.004 Affects Soundness or Structural Integrity Required for each repair item Yes | No Indicates whether the defect, damage, or deficiency noted in the original appraisal report affected the soundness and / or structural integrity of the improvement. 03.005 Repair Completed Required for each repair item Yes | No Indicates whether the repair to the defect, damage, or deficiency was completed. 03.006 Inspection Date Required for each repair item mm/dd/yyyy The date of the inspection for the individual repair.

#5 Reconsideration of Value (ROV) Guidance Page 1

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SOURCE: Federal Housing Finance Agency (FHFA) — News Release "FHFA Announces Enterprise Reconsideration of Value Policies" Published: May 1, 2024 URL:…

Reconsideration of Value (ROV) Guidance · FHFA_Enterprise_ROV_Policy_Announcement_2024.txt · Page 1 · View at official source (FHFA — Reconsideration of Value) →

SOURCE: Federal Housing Finance Agency (FHFA) — News Release "FHFA Announces Enterprise Reconsideration of Value Policies" Published: May 1, 2024 URL: https://www.fhfa.gov/news/news-release/fhfa-announces-enterprise-reconsideration-of-value-policies ===================================================================== FHFA Announces Enterprise Reconsideration of Value Policies Washington, D.C. — The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) published new Reconsideration of Value (ROV) policies after months of collaboration with FHFA and the U.S. Department of Housing and Urban Development's (HUD) Federal Housing Administration. A Reconsideration of Value is a request to an appraiser to re-assess the appraised value of a property due to potential appraisal reporting deficiencies or inappropriate selection of comparable properties, or based upon additional information the appraiser should consider. "Consistent standards for lenders and appraisers, coupled with a well-understood process for consumers to challenge appraisal findings, will help ensure that consumers are treated fairly," said then-FHFA Director Sandra L. Thompson. "These updates represent a powerful tool in combating racial bias in property appraisals and promoting valuation accuracy." In June 2023, as part of the Interagency Task Force on Property Appraisal and Valuation Equity, FHFA and HUD established a working group to develop consistent ROV standards. The Enterprises' new policies provide clear requirements for lenders to disclose and outline the ROV process for consumers, standardize communication to appraisers, and establish ROV response expectations. Lenders are also required to refer appraisers to local, state, and federal agencies for violations of anti-discrimination laws. Related policy sources: - Fannie Mae Selling Guide Announcement SEL-2024-03, Selling Guide Updates - Freddie Mac Bulletin 2024-6 - FHA ROV Mortgagee Letter (HUD) ===================================================================== NOTE: This is the original 2024 policy announcement establishing consistent ROV standards across Fannie Mae and Freddie Mac. See also the 21st Century ROAD to Housing Act (2026), indexed separately, which directs HUD, FHFA, USDA, and VA to standardize ROV procedures across the entire mortgage industry -- and note that FHA rescinded its own 2024 ROV policy in March 2025, so the FHA-specific ROV process is currently unsettled pending the new legislation's implementation.

#6 Fannie Mae Selling Guide Page 663

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units held in affordable housing programs (including units subject to non-eviction rent regulation codes), or units held by higher-education institutions for a workforce housing…

Fannie Mae Selling Guide · Selling Guide - 06-03-2026.pdf · Page 663 · View at official source (selling-guide.fanniemae.com) →

units held in affordable housing programs (including units subject to non-eviction rent regulation codes), or units held by higher-education institutions for a workforce housing program. project sponsor may own more than 20% of the stock or shares in the corporation and the related occupany rights provided that any such stock or share ownership above the 20% limitation pertains to units that are subject to statutory rent regulations that limit the sponsor's ability to sell their ownership interest in such shares or stocks. The lender must obtain documentation to validate the stock or share is subject to such regulations. The single-entity ownership requirement may be waived when the transaction is a purchase transaction that will result in a reduction of the single-entity ownership concentration. In such instances, the following requirements must be met: units owned by the single entity represent no more than 49% of the units; evidence is required that the single entity is marketing units for sale to further reduce single-entity ownership, with the goal of reducing the concentration to 20% or less of the project units; the single entity is current on all HOA assessments; and there are no pending or active special assessments in the project. Projects in Need of Critical Repairs Projects in need of critical repairs are those needing repairs or replacements that significantly impact the safety, soundness, structural integrity or habitability of the project's building(s), or the financial viability or marketability of the project. Critical repairs include conditions such as: material deficiencies, which if left uncorrected, have the potential to result in or contribute to critical element or system failure within one year; any mold, water intrusions or potentially damaging leaks to the project's building(s); advanced physical deterioration; any project that failed to pass state, county, or other jurisdictional mandatory inspections or certifications specific to structural safety, soundness, and habitability; or any unfunded repairs costing more than $10,000 per unit that should be undertaken within the next 12 months (does not include repairs made by the unit owner or repairs funded through a special assessment). Examples of some items to consider include, but are not limited to, sea walls, elevators, waterproofing, stairwells, balconies, foundation, electrical systems, parking structures or other load-bearing structures. If damage or deferred maintenance is isolated to one or a few units and does not affect the overall safety, soundness, structural integrity, or habitability of the project, then these requirements do

#7 IAAO Standards Page 51

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THIRD EDITION Federal Home Loan Mortgage Corporation (FHLMC) (Freddie Mac) — An organization that facil- itates secondary residential mortgages, for savings and loan associations,…

IAAO Standards · IAAO-Glossary_3rd-Ed_final.pdf · Page 51

THIRD EDITION Federal Home Loan Mortgage Corporation (FHLMC) (Freddie Mac) — An organization that facil- itates secondary residential mortgages, for savings and loan associations, to increase availability of residential mortgage financing. Federal Housing Administration (FHA) — A government-backed institution that provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single-family homes, multifamily homes, residential care facilities, and hospitals. Federal National Mortgage Association (FNMA) (Fannie Mae) — A quasi-governmental agency that purchases mortgages from originators; intended to increase liquidity in the home mortgage market. Federalism — Form of government in which power is constitutionally divided between a center or national government and states or regional centers. Fee — 1) A charge imposed by a government for the performance of a specific nonproprietary act that is made in recognition of the special benefit conferred by such act, or the special cost incurred thereby, and in an amount intended to be substantially equal to or less than the incurred cost; 2) A form of compensation for occasional personal services, especially of public officers or professional persons, measured in terms of services performed rather than in terms of time required for their performance; and 3) An abbreviation of one of the fee estates in property. Fee Appraisal — See Single Property Appraisal. Fee Simple — See Fee Simple Absolute. Fee Simple Absolute — An estate of infinite duration, freely alienable. The most complete ownership in real estate possible, although still subject to the four powers of government. May still be subject to other private encumbrances or restrictions. Fee Simple Condition Subsequent — Ownership interest that gives the grantee fee simple title to property so long as a specified event occurs. If the specified event does occur, the grantor has the right to regain title to the property. (Example: “Grantee owns the property in fee simple absolute, so long as it is used for residential purposes.”) Usually must contain the words “so long as” in the deed or may be interpreted as a fee simple determinable and not a fee simple on a condition subsequent. Fee Simple Determinable — Ownership interest that gives the grantee fee simple title to property unless or until a specified event occurs. As opposed to a fee simple on a condition subsequent, if the specified event does occur, the grantor automatically regains title to the property. (Example: “Grantee owns

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