FHA Appraisals

The Federal Housing Administration (FHA) runs several programs to promote home ownership. These programs are popular because they allow borrowers to buy a home with a smaller down payment than is required by most other lenders. FHA loans make it easier for people to qualify for a mortgage, but they’re not for everybody.

What is an FHA Loan?

An FHA loan is a loan insured against default by the FHA.Federal Housing Authority. In other words, the FHA guarantees that a lender won’t have to write off a loan if the borrower defaults the FHA will pay. Because of this guarantee, lenders are more willing to lend with lower rates, flexible terms and easier qualifications.

There are several programs that suit most borrowers.

  •     First Time home-buyers
  •     Rehab Loans(203k)
  •     Purchase/Refinance
  •     Reverse Mortgage

The appraiser must be on the FHA roster and an FHA case number must be issued BEFORE the appraisal can be scheduled.

A FHA appraisal has all the requirements of a conventional appraisal, with additionalrequirements designed to insure that any major repairs that will be needed within two years are identified and completed before the close of escrow.  This does not replace the need for a home inspection as the appraiser does not look for hidden problems or go into the level of detail of a licensed home inspector.

FHA appraisals are good for three months and stay with the house regardless of the lender or the borrower.
The appraiser must be on the FHA roster and an FHA case number must be issued BEFORE the appraisal can be scheduled.

If a property already has a conventional appraisal it CAN NOT be simply be “converted” to an FHA appraisal. It needs a case number and new inspection for the extra FHA items required by FHA, most of which are not included in a conventional appraisal.

The appraiser is required to:

– Identify any chipping, peeling or cracked lead-based paint – interior and         exterior
– Verify there are no issues with water damage or drainage
–  Insure proper ingress and egress (18″) from all     buildings to the lot line.
– Test for a properly working heater and, if present, air conditioner
– Test for adequate water pressure and no water leaks
-Validate every bedroom has exterior access
-Test for a working oven hood/fan (carbon monoxide     danger)
-Verify a minimum 60 amp electric box
-Test for working electric outlets in every room
– Identify any exposed wiring or missing electric box     cover plates
– Verify roof vents are screened and a maximum of  three layers of roofing  material
– Complete a head and shoulder inspection of attic and crawl space

The general rule is that inside issues must be fixed or replaced while outside items must be fixed or removed.  Central air is considered an inside item.

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