HUD HOC Reference Guide

F. Final Inspection on Properties

For final inspection guidance on "Under construction" or "existing less than one year old" dwellings. Please see: Mortgagee Letter 2001-27, HUD Handbook 4145.1 Chapter 6-3, and "Inspections" found in the Construction Definition section of this guide.

If the property is under construction and less than 90% complete at time of appraisal:

• The appraiser must have a complete set of the plans and specifications and the Builder Certification in order to do the appraisal (as described in Section C).
• The appraiser will perform the appraisal and call for a final inspection to be completed by a FHA Fee Inspector; or, when applicable, the local authority or equivalent. The appraiser will make the following statement on the appraisal report: "Property under construction; complete according to submitted construction exhibits."
• When the final inspection is completed by a fee inspector, the inspection will include photographs as noted in Item 1 above along with a statement on the HUD-92051 as follows: "This is a newly completed dwelling that was not completed under HUD or VA inspections. The dwelling appears to be in conformance with the submitted construction exhibits." Please see: HUD Handbook 4145.1 Chapter 6-3.

If the appraisal is to serve as the final the home must be 100% complete at time of the appraisal and: (This procedure does not apply to manufactured homes.)

• The appraiser must have a complete set of the plans, specifications (as described in Section C) including the Builders Certification HUD-92541 in order to do the appraisal.
• The appraisal serves as the final inspection and Form HUD-92051 is not required:
• The appraiser is to verify general conformance with plans and specifications;
• Inspect for health and safety violations;
• If no health and safety problems are noted and the property is ready for occupancy, the appraiser is to make the following statement in the remarks section of the appraisal: "This is a newly completed dwelling and appears to be in conformance with the submitted construction exhibits."
• Take a clear photograph (in addition to the standard appraisal photos) of each diagonally opposite front and rear corner of the house to record adequate grading and drainage of the site; and
• Make a statement on the appraisal report of the acceptance of the grading and drainage.

The Department requires that all utilities are on and fully functional during a final inspection otherwise, the property is not 100% complete.