FHA Appraisal Requirements Insights
While there is a common sellers and buyers view that FHA appraisal guidelines at 2015 are too tough, the can be a better way to evaluate the 2015 FHA Appraisal guidelines. For the buyer the FHA appraisal value is the maximum amount of FHA insurable mortgage loan, you will get when applying for an FHA home mortgage loan. Take note that the FHA and the FHA lenders which rely on the insured mortgage, will not approve a loan that is higher than this assessment.
While many request FHA home loans because of FHA loans have financial flexibility compared to regular bank loans:
- FHA mortgage loan requires only 3.5% down payment from buyers,
- A minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program.
- New borrowers with less than a 580 FICO score will be required to put down at least 10%.
Another crucial point of view is that FHA rules will prevent substandard housing from being passed on to FHA mortgage seekers, so as a buyer you have better chances to buy a livable place rather than a cheap dump.
FHA Appraisal Assessment 2015
The only way the FHA will proceed in checking the loan request applied is when it is submitted with a full FHA approved appraisal report. Without this FHA appraisal report the application will not be dealt and the whole process will be paused. The FHA has their own approved appraisers, and they alone are the ones who have the knowledge and permission to conduct FHA appraisal reports. A rough estimate is that there are more than 50,000 FHA-approved appraisers nationwide, so you can find one nearly in any big town and city.
These FHA appraisal requirements are part of the Appraiser Independence (ML 2009-28) requirements for Federal Housing Administration (FHA) home mortgage loans, these new requirements which are relevant today at 2015 officially took effect February 15, 2010.
HUD and Appraisal Safety Code
When a person invites a home inspection, or a regular appraisal, the appraiser will evaluate the market worth of the property, usually by comparing three similar real estate closed deals that took place in the near local area in the last six month. But when requesting a FHA appraisal, expect that the HUD (U.S. Department of Housing and Urban Development) has different concerns.
The main issues that the FHA approved appraisers are expected to check and confirm is (1) health and safety and (2) structural issues. FHA appraisers guidelines are to note any seen or possible property conditions that will affect the health and safety of the home buyers. It is these guidelines which are focused on soundness, safety, and security that have given the FHA appraisal its notorious name..
Specific FHA Appraisal Guidelines
As you can already see the FHA Appraisal Guidelinesare strict and made for the best interest of the borrower and for the lender. Here you can get some insights what are the FHA appraiser and inspectors are going to look for in your property working under the 2015 FHA appraisal guidelines:
- FHA 2015 appraisal guidelines seek minimal home appliances, so that the home is livable, a stove, a dishwasher or air ventilation/cooler.
- FHA appraisal request proper water pressure, proper flushing toilets, hot and cold water.
- Appraiser will inspect crawl space and attic space, for dampness or water pooling.
- HUD appraisal guidelines determine if the property roof has at least two years left without need for renovation.
- Electric and Heating FHA Appraisal Guidelines check refers home to have adequate heating (at cold areas) or cooling (in hot areas).
- Another 2015 guideline for appraiser will be checking all electric wiring in the house.
- Hot Water Heater FHA appraisal inspection – all components needs to be in perfect safe and working condition.
- FHA appraisal guidelines for Lead-based Paint – For homes built before 1978 a peeling lead based paint is unacceptable.
- Fire Safety guidelines concerning bedroom windows – No broken windows, iron barred windows should be able to be opened from the inside.
- Sewer systems, wells, and water quality;
- Conformity of property to the neighborhood (The property maybe entirely appropriate at another location, but not in its actual location);
- Off site improvements (street surface, curbs, sidewalks, curb cuts, driveways);
- Potential for termite infestation;
As you can see the list is long and very specific, you can see an in depth explanation of what the FHA appraiser will inspect.
Only homes that comply with these FHA appraisal guidelines will be eligible for FHA 2015 home loans.
If Property Fails To Pass The FHA Appraisal Check
There is a chance that the home you wish to buy, and need the FHA loan for, may not pass the FHA standards and basic guidelines. In this case you have some options in-front of you, as it seems the seller was selling you a place which the FHA guidelines found not safe and sound for proper domestic living.
You can take this appraisal report and try to open the negotiation on the price! You might get it lower as the seller will understand he has no chance to sell the place to FHA loans prospects. Lower price will not solve the problem, if crucial repairs are the problem.
If the appraiser found that the place has some major repairs needed the seller will have to do those repairs, otherwise the whole real estate deal gets to a complete stop. One good advice is to begin the the FHA appraisal inspection at the very early stages of the FHA filing applications – So there is enough time to make the necessary repairs to the property.
Some sellers may offer that you make the repairs, (for a substantial reduction of the home price in return) this may be tempting but a financial disaster too.. in case that you agree to such a deal, take to consideration that all the repairs will be done before the closing of the home, and if by any chance you still do not get the mortgage… you are in a deep financial pithole.
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