FHA Appraisal Requirements... Are they as strict as they used to be?

By
Real Estate Agent with Realty ONE Group

I recently read a refreshing article about how FHA appraisal guidelines are not as strict as they used to be. I am hoping the appraisers will start taking this to heart because I have had some crazy requirements with FHA Appraisals ( carpet needing to be cleaned and the grass to be mowed seem to come to mind).

Steve Lines with Academy Mortgage writes in the Arizona Journal of Real Estate & Business about the requirements. Basically he states that FHA permits an "AS IS" appraisal for FHA loans for property's that have problems that have occurred from lack of maintenence or normal wear and tear. These guidelines have been in place since January 2006, but I haven't run into an appraiser who has done it that way yet.

FHA does state what is a Definite Repair Needed:

Inadequate access from bedrooms to exterior of home.

Leaking Roofs

Structural Problems (foundation, trusses, beams etc)

Defective Paint if constructed before 1978

Defective exterior Paint constructed after 1978 if finish is not protected

 

Other than those most other items can pass an FHA Appraisal. Good to know if you didn't already know this! The majority of loans I have done in the last 2 years are FHA, so I am always looking for more information so I can know what to expect for my buyers.

 

 

 

Posted by

Betsie Melter, REALTOR, GRI, ABR

Realty ONE Group

3530 S. Val Vista Dr. #114 Gilbert, AZ 85297

480.734.3644

realtorbetsie@gmail.com

www.betsiemelter.com

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Topic:
ActiveRain Community
Location:
Arizona Maricopa County Chandler
Tags:
fha appraisal guidelines

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Anonymous
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Ambassador
780,120
Charlie Ragonesi
Homes - Big Canoe, Jasper, North Georgia Pros
AllMountainRealty.com

I have found if the front steps leading up to the house are in disrepair it almost always means an inspection failure. Also had one fail because the drive left no room to turn around.

June 08, 2010 04:57 PM
Rainmaker
342,029
Rodney Mason
FHA 203K, USDA, VA, HomePath Renovation Specialist
Prospect Mortgage

Typically, anything affecting safety, security, or saleability must be addressed.  The changes were addressed in mortgagee letter 2005 ML-48.  Gone are the days of properties failing FHA because of torn wallpaper or other minor issues.  Some of the most common issues requiring repair are:

  • Exposed electrical wiring
  • Wood to earth contact
  • Peeling/flaking exterior paint
  • Exposed exterior wood

 

 

June 08, 2010 10:25 PM
Rainer
32,980
Betsie Melter
Realty ONE Group

Thanks for the clarification Rodney.

June 22, 2010 03:43 PM
Anonymous
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Rainer
32,980

Betsie Melter

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