subject: What are Some FHA Appraisal Guidelines [print this page] In applying for an FHA mortgage, one of the requirements is the property must pass the FHA appraisal guidelines. This is not something to get overly worried about. FHA is concerned about soundness, safety, and security. But this is not a house inspection. FHA is looking to insure the mortgage so they will be concerned about some things, while other things that you may consider important is not to them. For example here are some things the FHA appraiser will look at:
They check to see if the appliances are functional. In other words, if there is a dishwasher or stove, it must work.
Whatever heating the property has it must be in good working order. If it is oil heat, then the outside tank unit must be safely away from the home.
For all homes built before 1978, the indoor paint must be in good order. In other words not chipping, peeling, or flaking. For all homes built after 1978, the exterior paint must be in good order. So there would not be any exposed surfaces. If there is a problem with the paint in either the interior or exterior you cannot just paint over it. You must go through the process of scrapping the problem areas and then painting.
They also check the water pressure by flushing toilets and turning of faucets checking to see if the hot and cold water is working properly.
They check to see if the water heater is working properly.
They check the attic for proper ventilation, look for exposed or frayed wires, and evidence of a previous fire. They also check for any light coming in the attic which would give evidence of weakness in the attic.
They also check the crawl spaces for debris or evidence of standing water. While there they look for any foundation support problems.
They inspect the roof for leaks.
They look at the interior flooring to be sure there are no safety or health issues.
They then inspect the windows and doors. They cannot be broken, although the windows can have cracks as long as those cracks do not pose any safety or security issues.
Are there any revealed wires? Do they pose a risk? Are they dangling? That is something they will look at.
They will take a close look at the foundation for any cracks. That is an indication of an unsafe foundation and that will not pass.
As you look at these you can see that the guidelines are focused on soundness, safety, and security. Interestingly FHA does not require air conditioning, insulation, or smoke detectors. But, if any of those items are in the home, they must work properly.
Remember, this is not a home inspection. So they will not look at the same things a home inspector would. You will still need to have a home inspection to be sure it is the home you want to buy.
What do I do if the property does not meet the appraisal guidelines?
All is not lost. You can go back renegotiate with the seller. If the price is the problem, renegotiate a lower price with the seller. If repairs are the problem, then the seller must make the repairs so the purchase process can continue. That is why it is a good idea to have the FHA appraisal early in the process so there is time to make the repairs.
The seller may offer to reduce the price of the home so you can make the repairs, but remember you still need to qualify for the FHA mortgage. These repairs must be done before the closing of the home. Be careful offering to do the repairs for the seller. What happens if you still do not get the mortgage, then you are out the money for the repairs.
This will give you some of the FHA appraisal guidelines. This way you have an idea of what they may look at when you are searching for your perfect home. Do not let the lender talk you out of an FHA mortgage. It is the best option out there for first time home buyers.
