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FHA New Construction Inspections and Builder Warranties
FHA new construction must pass inspections that show the home was built to code, usually through your local building department's permit and certificate of occupancy. The builder also signs two HUD forms: a Builder's Certification (HUD-92541) covering the plans and site, and a Warranty of Completion of Construction (HUD-92544) that protects you after you move in.
If you're building with an FHA construction-to-permanent loan or buying a brand-new FHA-financed home, here's what those inspections and forms are, who handles them, and what you should watch for.
What inspections does FHA require for new construction?
HUD wants proof that a newly built home meets the building code where it sits. Under the FHA Single Family Housing Policy Handbook (4000.1), the lender can usually satisfy this in one of these ways:
- Local code enforcement: A copy of the building permit and the certificate of occupancy (or the local equivalent). This is the most common path.
- Certified code inspector: Where local documents aren't available, inspections by an inspector certified by the International Code Council.
- Licensed third party: If no certified inspector is available, a disinterested, state-licensed professional such as a registered architect or structural engineer may perform the inspections.
For a home that hasn't been started when it's appraised, inspections without local code documents typically happen at three stages: footing, framing, and final. Homes already under construction or recently finished may only need a final inspection or the certificate of occupancy. Inspections done by a certified inspector or third party are reported on HUD's Compliance Inspection Report (HUD-92051) or an approved state form.
Is an FHA inspection the same as the appraisal?
No. The FHA appraiser estimates value and checks that the home meets HUD's minimum property standards. Code inspections confirm the house was built correctly. Lenders also order their own draw inspections during the build to confirm work is done before releasing money to the builder. Those are separate from code inspections, too.
What is the HUD-92541 Builder's Certification?
The Builder's Certification of Plans, Specifications, and Site (HUD-92541) is the builder's written statement about the site and the plans. It covers items such as:
- Whether the site is in a special flood hazard area, and if so, the flood documentation needed
- Noise sources, airport clear zones, and other site hazards
- Nearby oil or gas wells, storage tanks, and similar concerns
- Whether the home is built to the applicable codes and plans
HUD generally won't insure new construction in a special flood hazard area unless the builder provides an approved flood map change or an elevation certificate showing the home is built above flood level.
What is the HUD-92544 builder warranty?
The Warranty of Completion of Construction (HUD-92544) is required for FHA new construction. The builder warrants that the home was built in substantial conformity with the plans and specifications the FHA valuation was based on.
A few things to know:
- Both sides sign it. The builder and the buyer or owner execute the form.
- It has a deadline for claims. You must give the builder written notice of problems within the period stated on the form. Read it closely and put the date on your calendar.
- It's about building to plan. It isn't a full home warranty for appliances or normal wear.
Do you still need a third-party warranty or protection plan?
Usually not for FHA itself. HUD once required an extended third-party protection plan in certain new construction cases, but it removed that requirement and kept the HUD-92544 builder warranty in place.
That said, some lenders still ask for one in certain situations, and many builders offer a third-party warranty anyway.
Pros of a third-party plan: Longer structural coverage, and a claims process that doesn't depend only on the builder staying in business.
Cons: It can add cost, coverage often has exclusions, and it doesn't replace code inspections or the HUD-92544.
Other documents FHA may require on a new build
| Item | When it usually applies |
|---|---|
| Termite protection builder's form (HUD-NPMA-99-A) | Most new construction, unless the area is on HUD's termite exception list |
| Termite service record (HUD-NPMA-99-B) | When the home is treated with certain termite systems or barriers |
| Well water testing | When the home uses a private well |
| Septic approval | When the home uses a private septic system and local health rules require approval |
| Energy code documentation | When required by local code or HUD's energy standards for new homes |
| Flood documentation | When any part of the site touches a mapped flood hazard area |
Requirements vary by lender, and many lenders add their own rules on top of HUD's. Your loan officer can give you the exact list for your build.
Tips to keep FHA inspections on track
- Choose a builder who knows FHA. Builders familiar with these forms tend to move faster.
- Pull permits early. Missing permits are one of the most common causes of delays.
- Keep copies of everything. Permit, inspection reports, certificate of occupancy, and warranty forms.
- Walk the home before closing out the build. Note any issues in writing so they're covered under the builder warranty.
- Ask about private wells and septic early. Testing and approvals can take time.
Frequently asked questions
Does FHA require a home inspection on new construction?
FHA requires code-compliance proof, such as a permit and certificate of occupancy, or inspections by a certified inspector or licensed third party. A separate home inspection is optional but often a smart idea.
What is form HUD-92541?
It's the builder's certification about the site and plans, covering flood zones, nearby hazards, and code compliance.
What does the HUD-92544 warranty cover?
It covers the builder's promise that the home was built in substantial conformity with the plans and specifications. Claims must be made in writing within the period on the form.
Is a third-party protection plan required for FHA new construction?
HUD no longer requires one, but some lenders may, and many builders offer one.
Who orders the FHA inspections?
The lender is responsible for collecting the inspection documents, often working with the builder and the local building department.
Ready to build with FHA?
Knowing the inspections and builder forms up front can help an FHA build go more smoothly. Get started at My Construction Path. Tell us about your lot, your builder, and your plans, and we'll connect you with lenders who offer FHA construction loans.
My Construction Path is not a lender and does not make loans or credit decisions. Not all borrowers will qualify. Equal Housing Opportunity. Requirements vary by lender, loan program, and location. This article is for general education and is not a commitment to lend. It is not a quote of rates, payments, or loan terms. FHA loans are insured by the Federal Housing Administration, which does not lend money directly.