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Nationwide FHA Appraisals:
An FHA appraisal is unique as it is required to meet all of the guidelines for USPAP, the lender and HUD
as well as standard appraisal guidelines. The appraisal is a critical component of an FHA mortgage. FHA recently adopted
similar guidelines to the HVCC and to
aid our clients and prospective clients
we have prepared a
best practice
implementation guide.
- FHA Appraisal Guidelines
- Best Practices Implementation Guide
- Reverse Mortgage Appraisal
Please take a look at the guide and
contact us if you have any questions or
concerns. We are industry experts on
HVCC Compliant and appraisal compliance
and will ensure you and your company are
in full compliance with all guidelines.
FHA Appraisal guidelines are very
similar to the HVCC as they do not allow
a mortgage originator to select or
retain an appraiser. Due to this
regulation most appraisals will be
ordered through a third party appraisal
management company.
Our apache appraisal management
system allows us to track, manage and
route FHA case numbers to the designated
staff member. The system also allows the
client to update the case number within
our system to ensure the appraiser
assigned has the case number before the
inspection.
Get more
information
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Valuations At Their Best
Peace of mind is
invaluable. That's why Coester makes it easy
for lenders to order property valuations,
and full guarantees its service.
- 100% Guarantee on
valuation
- No Fee
implementation and No Fee for doing
business.
- Full Range of
Valuation products, URAR appraisals,
BPO's, appraisal review and AVM's/
- HVCC and FHA
Compliance Solutions
- Access to every
certified appraiser in the U.S
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FHA Minimum Property Standards
With the extensive property and
inspection requirements an FHA appraisal
must meet. It can become confusing as to
what needs to be fixed or not as well as
what is acceptable by FHA. The HUD
Handbook is over 450 pages thick and
that is exactly why we have summarized
important information below.
FHA has always had stringent appraisal requirements in that even minor defects in the properties condition needed to be remedied prior to closing the loan. In December 2005 FHA made a number of changes to their requirements, allowing for "As Is" appraisals, even if minor defects to the property condition exist which makes it much easier to obtain FHA Financing.
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Requirements for FHA appraisals may be lightened slightly but there are still a number of conditions remaining.
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- You must use an appraiser from FHA's approved list
which is the FHA Roster.
- As of Oct, 1 2009 FHA requires
appraisers be certified residential
or certified general. All licensed
appraisers have been removed from
there approved list in the effort to
ensure accuracy of appraisals.
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- The lender must provide the appraiser with a case number for inclusion on their report.
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- Major deficiencies in the property's condition still require a cost to cure.
It is always best to let the lender select the appraiser but even more so if you are getting an FHA appraisal because the appraiser must be well versed in FHA requirements.
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Further Details of FHA appraisal changes:
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FHA appraisals occurring on or after January 1, 2006 now only require repairs for conditions that rise above cosmetic defects, minor defects, or normal wear and tear. Appraisers must report ALL deficiencies but lenders can use professional judgment and prudent underwriting practices to determine when a property's condition is a threat to safety or jeopardizes structural integrity. |
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This is a list of examples that no longer require automatic repair to existing properties, but are not limited to:
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- Cracked or damaged exit doors that are otherwise operable
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- Defective paint surfaces in homes built after 1978
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- Minor plumbing leaks such as faucets
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- Worn or soiled floor coverings or finish
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- Rotten or worn out counter tops
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- Damaged plaster or sheet rock or other wall and
ceiling material on homes constructed after 1978
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- Trip hazards such as sidewalks or badly installed carpet
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- Lack of all weather driveway surface
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Examples of conditions that may be of risk to health and
safety of occupants or soundness of property that continue
to require automatic repair, but are not limited to:
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- Inadequate access/egress from bedrooms to exterior of home
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- Leaking or worn out roofs
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- Structural problems such as foundation damage caused
by settlement
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- Defective paint surfaces in homes built before 1978
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- Defective exterior paint on homes built after 1978
where finish is unprotected
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FHA Inspection Requirements |
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FHA no longer mandates automatic inspections for the
following items and or conditions in existing properties:
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-
 Wood Destroying insects: only required if there is
evidence of active infestation or appraiser states a
need for one, mandated by state or local jurisdiction,
or at lenders discretion
- Well (individual water system): It is required if
mandated by state/local jurisdiction, if suspect of
contamination or requires purification system, or when
there is evidence of: pipe corrosion, intensive
agriculture, coal mining/gas drilling, dump, junk yard,
land fill, gas station or dry cleaning operation with in
1/4 mile, or if there is a bad smell, taste, or
appearance
- Septic: only required if evidence of failure,
mandate, or lenders discretion
- Flat or unobservable roof
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Examples of conditions that still require automatic
inspection, but not limited to: |
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- Standing water against foundation, or excessively
wet basement
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- Hazardous materials on site
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- Faulty mechanical systems: electrical, plumbing, or
heating
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- Structural failure: settlement or bulging foundation
walls
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