BECOMING A GRANDMOTHER HAS SOME SIMILARITIES TO FINDING THE PERFECT HOUSE!

What are appraisers looking for on FHA Appraisals?  Why are they different?  

Although FHA does not require a home inspection on their transactions, it is highly recommended.  This may be why the appraisal is more extensive.  The basic difference between a “regular” appraisal and an FHA/VA appraisal is the level of detail.  The FHA guidelines are based on health and safety of the potential homeowner and include primarily the lot grade, foundation, ventilation, mechanical systems, air conditioning and heating systems, electricity and crawl spaces (when present).  Most importantly, the home must be comfortable, habitable and without any potential hazards to the occupants.  

 -The lot should be graded so the land slopes away from the residence.  Therefore, it prevents moisture from entering the foundation. 

-The foundation should be in good repair with no signs of cracks and it must be able to withstand “all normal loads imposed” on it.

-Many homes built before 1978 still contain lead-based paint.  The appraiser will check for any chipping or peeling paint.  If any paint is “fryable” (which includes chipping or peeling) it must be corrected prior closing the loan. 

-Because safety is a major concern, all steps and stairways must have a handrail. 

-The heating system must be sufficient to create “healthful and comfortable living conditions” inside the home. 

-All mechanical systems must be in working order. 

-The roof should be in a good state of repair with no visible signs of areas where moisture may enter the home.  It should also “provide reasonable future utility, durability and economy of maintenance.”  Therefore, the roof must still have economic life left.  The number of years of life left in the roof is many time judgmental and controversial.  Obviously, leaking roofs, or roofs with peeling or curling shingles has no economic life left.  Economic life is life that contributes to the value of the home. 

-Each bedroom must have adequate ingress/egress to the exterior of the home, for fire safety reasons.  Therefore, there must be a working window (large enough to allow someone to climb through it) or door in each bedroom. 

So when looking at a home that will be financed FHA/VA, look for any items that may cause a health risk or safety issue.  According to HUD Handbook 4150.2, the home “must be free of all known hazards and adverse conditions that may affect the health and safety of the occupants.”