What are the requirements for Vacant Property Inspections?

A Vacant Property Inspection is an inspection by the Mortgagee of a Property that is not occupied.
The Mortgagee must take reasonable actions to protect the value of the security, including performing the following required inspections for vacant or abandoned Properties.
The Mortgagee is liable for any damage resulting from the Mortgagee’s failure to preserve and protect the Property unless the Mortgagee can prove that the damage occurred prior to the date the Property became vacant.
A First Time Vacant (FTV) Property Inspection is the first inspection performed by the Mortgagee to ascertain the condition of a vacant or abandoned Property.
The Mortgagee must perform the FTV Property Inspection on the date it takes possession of a vacant or abandoned Property.
The Mortgagee must:
  • secure the Property, if possible;
  • pressure-test all water supply and upload photographs of the results of the test into P260;
  • address all imminent and urgent safety hazards and determine what repairs are required to prevent damage to the property; and
  • photograph the primary exterior facades and interior areas of the primary and secondary Structures, including any damage found.
The Mortgagee must document the overall condition and any damage to the grounds and Structures in the inspection report.
The Mortgagee must advise HUD when the mortgaged Property becomes vacant by reporting in Single Family Default Monitoring System (SFDMS):
  • the Occupancy Status Code; and
  • the date when the Mortgagee determined that the mortgaged Property became vacant.
The Mortgagee must perform Vacant Property Inspections every 25-35 Days after the FTV Property Inspection until the mortgage Default is cured or until conveyance of the property to HUD. In areas of high vandalism or where local ordinances require more frequent Vacant Property Inspections, Mortgagees may perform Vacant Property Inspections more frequently than HUD’s 25-35 Day requirement and request reimbursement for these inspection costs.

At each inspection, the Mortgagee must:
  • photograph the overall condition of the interior and exterior of the primary and all secondary Structures;
  • monitor the security and maintenance of the Property;
  • assess and manage damage that requires repair, replacement, or removal; and
  • address all emergency repairs.  
The Mortgagee must document all Property Preservation and Protection activities performed on vacant Properties.
The Mortgagee must retain in the servicing file:
  • evidence of payment to the inspector;
  • copies of all completed inspection reports and photographs of the Property; and
  • any police reports and/or letters from a local law enforcement agency evidencing the need for additional protective measures.

Questions related to the SFDMS may be emailed to sfdatarequests@hud.gov

HUD's Single Family Delinquency / Default Reporting web page is available at https://www.hud.gov/program_offices/housing/sfh/nsc/sfdms
See policy in Handbook 4000.1 Section III.A.2.h.xiv. at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-04170