The Federal Housing Administration will no longer make two out of the three inspections it has been making on houses being constructed by members of the Home Owners Warranty program. The change is expected to result in less delay for builders and ultimately savings for purchasers.
The FHA announced recently that its inspectors will henceforth not examine the foundation and the raw plumbing and wiring as they are being installed in new houses. Instead, the government agency will depend on the HOW builders, relying on FHA standards, to make their own preliminary inspections. But FHA inspectors will make a final on-site check before the house is sold. Last July the Veterans Administration also began accepting HOW-built homes without preliminary plan approvals or on-site insepections. The VA now sends in its inspectors only at the point where the trim, like doors and windows, is about to go on the structure.
The HOW program, begun four years ago by the National Association of Home Builders, is the only national warranty of its kind for new houses. Participating builders offer a one-year warranty on workmanship and materials, a two-year guaranty against major structural defects, and eight years insurance against those same defects.
The HOW plan also has an informal dispute-settlement procedure, as required by the Magnuson-Moss Act. In the II months since the Federal Trade Commission allowed it, 84 percent of all conciliations have been settled without further action, according to the HOW Corp.