FHA Question this week: Can a buyer use an FHA loan to purchase a home where the sole source of heat is a wood burning stove?
This week a Realtor that is listing a home did a great job for their client by asking if the home could meet FHA and other guidelines for heat up-front. By asking the question, he was able to provide his seller with valuable information which makes the home “financeable” and would have a broader range of buyers.
The answer to this question is “No, FHA says the appraiser must notify the mortgagee if the permanently installed heating system does not”:
- Automatically heat the living areas of the house to a minimum of 50 degrees Fahrenheit in all gross living areas, as well as in non-gross living areas containing building or system components subject to failure or damage due to freezing. The key words in this guideline for wood stoves are “automatically heat” because a wood stove must be manually filled with wood to provide heat to the house and therefore cannot be used. A permanently mounted space heater that has a temperature control should work though as long as it or multiple heaters can heat the whole house
- Provide healthful and comfortable heat or is not safe to operate
- Rely upon a fuel source that is readily obtainable within the subject’s geographical area
- Have market acceptance within subject’s marketplace and
- Operate without human intervention for extended periods of time. This also is an issue with wood stove heat.
Central air conditioning is not required but, if installed, must be operational. If it is not operational, the appraiser must indicate the level of deferred maintenance, analyze and report the effect on marketability, and include the cost to cure.
Solution for the Realtor and Seller is that the seller can increase chances of being financed by installing a permanent wall mounted gas or electric heater or similar at a minimal cost.