HUD Stress' Need For Home Inspections
January 28, 2000

Contact ...
For More Information Contact:
Charles M. Bellefontaine - 630-327-2700
Public Relations Chairman

HUD Stress Need For Home Inspections
The real estate industry and the U.S. Department of Housing and Urban Development (HUD) have launched a major effort to increase public awareness of the need for homebuyers to get a professional home inspection before purchasing any property.

The comprehensive consumer and industry - wide education effort is spelled out in a Memorandum of Understanding among HUD, the Mortgage Bankers Association of America (MBA) and the National Association of Realtors (NAR) to support the Homebuyers Protection Initiative announced June 10, 1999 by HUD Secretary Andrew Cuomo

HUD Emphasizes Value of Home Inspections
HUD said its initiative will improve home appraisals for more than 1 million families who purchase homes each year with mortgages insured by the Federal Housing Administration (FHA) and is designed to protect consumers from buying homes with major undetected defects. For example, it specifies that homebuyers will sign and date a "Consumer Notice," a new informational form, before they purchase a home with an FHA mortgage. The form advises them to get a home inspection in addition to an appraisal.

The Memorandum of Understanding expresses the mutual intent of HUD, NAR, and MBA to make home purchasers using FHA-insured mortgages better aware of the importance and value of home inspections in the home buying process, and of the distinct purposes of an inspection and the appraisal of the home.

Appraisals and Inspections Both Vital
The Appraisal Institute says the role of the home appraiser is to "provide a professional opinion, usually an estimate of market value, to be used in making real estate decisions. Typically, appraisers are employed by lenders to estimate the value of real estate involved in a loan transaction."

The American Society of Home Inspectors (ASHI), the leading non-profit association of professional home inspectors, explains that home inspectors provide a written inspection report for home buyers and sellers that describes the visible existing construction and infrastructure condition of the home on the day the inspection was performed. The report calls attention to systems and components that may require major repair or do not function properly.

NAR, HUD, MBA Agree to Actions
Among the actions agreed to by parties to the Memorandum of Understanding in support of professional home inspections are:

• NAR - Encourage Realtors to provide purchasers with information on sources for contacting home inspectors, including the ASHI Web site at http://www.ashi.com, when presenting to homebuyers the new Homebuyer Summary form specified in the HUD initiative. And, encourage Realtors to recommend, at the time of providing the homebuyer with the Consumer Notice, that he or she obtain a home inspection.
  
• HUD - Provide posters and exhibits to encourage homebuyers to obtain home inspections. Use its Web site to explain the potential value of a home inspection and the difference between a home inspection and an appraisal, urge consumers to get a home inspection, and promote consumer education about home inspections. Encourage its members to include in their homebuyer-counseling and education initiatives information that emphasizes the potential value of obtaining home inspection.

ASHI is working with its fellow specialized real estate industry professional to provide necessary assistance to achieve the objectives of the Memorandum of Understanding, which are in harmony with ASHI's own objectives. These objectives enable consumers to make an informed decision on the most important investment of their lives - the purchase of a home.

--------------------------------------------------------------------------------

For More Information Contact:

Homebuyers in northern Illinois who wish to know more about home inspections or find qualified local home inspectors may contact the organization at:

Northern Illinois Chapter of the ASHI
209 East Butterfield Road - Suite #255
Tel: 630-327-2700
FAX: 630-771-0429
Internet: http://www.nicashi.com

All others may contact the national organization at:

American Society of Home Inspectors
932 Lee Street, Suite 101
Des Plaines, IL 60016
Tel: 800-743-2744
Internet: http://www.ashi.com