Dear Barry,

I am in the process of purchasing an older commercial/residential property, using the 203(k) program to finance the purchase. Since the 203(k) requires a feasibility study of the property, is it still necessary to get a home inspection? -- Chad

Hi Chad,

As I understand the scope and intent of a "feasibility study," this would be a projected financial viability evaluation of the property from an investment
perspective, considering primarily the potential for value appreciation, costs of ownership, and optimum use.  On the basis of this understanding, there is little or no similarity between that process and a visual home inspection.

The purpose of an inspection is to provide you, the buyer, with a full disclosure of the general physical condition of the property and its component systems, with particular focus on significant defects involving function, safety, and
stability.  The inspection report provides you with an detailed evaluation of the roofing installation and materials, the foundations, site drainage, fire safety, electrical, plumbing, and heating systems, and the state of compliance and
upkeep in countless other areas of the property.

In addition to its obvious benefits, a home inspection could be regarded as an
extension of the feasibility study itself, considering the financial impact the
general condition and overall safety of the property could have on the
profitability of the investment.

Unless the person performing the feasibility study is a professional home
inspector, I would strongly advise that you avail yourself of the benefits and protection of a thorough physical inspection of the property.