Do You Need a Home Inspection for a USDA Loan?
What inspections are required for a USDA Loan?
Once the sales contract is signed, you might wonder if a home inspection is required for a USDA loan?
In today’s video, I will discuss if a home inspection is required for a USDA home loan along with reviewing other USDA inspection requirements.
Don’t forget that in addition to our USDA expertise, we are also a VA-approved lender, work daily with low down payment conventional loans, and the FHA program.
Realtors and buyers refer to us for our overall Government loan experience, so just call or email to discuss your next pre-qualification or if you just want to take advantage of our free Second Opinion Service!
(800) 806-9836 Ext. 280
What is a Home Inspection, and Do You Need One for a USDA Home Loan?
The short answer is no, you don’t have to get one. However, USDA guidelines do state that applicants are “encouraged to obtain a detailed home inspection of the property”.
A home inspector will generally check the home’s foundation and major mechanical systems like electrical, roof, plumbing, and heating/cooling to ensure that these components are working properly.
Thus, while it is not required to have a home inspection for a USDA loan, it is highly recommended and in the buyer’s best interest.
What are the Advantages of a Home Inspection for a USDA Loan?
A home inspection will protect and improve your confidence as a buyer. It also will help you understand more about the property you wish to purchase, and its potential defects.
A home inspection will include the following benefits:
- Provide a report which details the status of all major mechanical systems
- Identify items that may need to be fixed prior to purchasing the home
- Identify potential health and safety hazards
What is the Difference Between an Appraisal and a Home Inspection?
While a home inspection is meant to assess the property’s conditions and any potential defects, appraisals are known for establishing the property’s value. Additionally, appraisals ensure minimum property conditions (as outlined per USDA and HUD Handbook guidelines) are met.
If the USDA appraisal cites the need for further inspections (i.e.. roof, foundation, plumbing, septic tank, etc.) then those specific inspections would be required.
However, remember that a USDA appraisal should not be treated as a substitute for a home inspection.
While home inspections are not required, USDA purchase transactions will require an appraisal!
The appraisal protects the lender from loaning you more than the property is worth and making sure that it meets loan program requirements. The inspection helps protect you from unknowingly buying a property with problems or issues.
What are the Other Types of Inspections you Should Be Aware of?
Individual Water Systems (Private Wells)
According to USDA guidelines, individual water systems owned and maintained by the homeowner must complete a water test.
This test must be performed through the local health authority or a state-certified laboratory.
A “qualified appraiser who certifies the property meets required HUD’s Single-Family Housing Policy Handbook” would satisfy the requirement for the lender to obtain a septic evaluation.
However, the “septic evaluation may require additional inspections as a result of the inspection.”
USDA Guidelines state the following: “Termite/pest inspections are not required unless the lender, appraiser, inspector or State law requires the inspection to confirm the property is free of active infestation.”
Here are some key takeaways from today’s tip about home inspections:
- While home inspections are highly encouraged, they are not required
- A home inspection will help you understand more about the property you wish to purchase, and its potential defects
- Appraisals are required, and after completion, additional inspections may be needed
- While private wells and individual water systems require a water quality test, septic tank inspections are not needed (unless specified by the appraisal).
USDA Approved Lender
I founded Metroplex Mortgage Services way back in 2001 and on top of being a top-ranked USDA Approved Lender, my team is known for their government loan expertise and dedicated service when walking homebuyers through the mortgage qualifying maze.
With that in mind, it is a great time to get qualified for a USDA Loan with many benefits, including…
- 100% financing
- Flexible credit guidelines
- The ability to finance closing costs
- And much more!
Remember to just call or email if you want to discuss a scenario, get pre-qualified, or to take advantage of our free second opinion service!
(800)806-9836 Ext. 280
As always, I want everyone to make it a great day and I look forward to seeing you right here for the next tip of the week!
P.S. Don’t forget to download our USDA blueprint for success with this link below.