FHA Appraisal Info
An FHA-insured loan is a US Federal Housing Administration mortgage insurance-backed mortgage loan. It allows different financing options a Conventional loan will not allow. With FHA loans, the appraiser has to appraise the property as she or he would with a Conventional loan. But there also needs to be an inspection of the property. FHA, because the loan is insured by the government asks for this inspection so there is less of a chance there are any financial obligations after the loan closes. So the appraiser is looking for the structure's quality, the interior and exterior condition, the state of fixtures and systems, and the condition of the lot.
Below is a list of what the appraiser is looking for:
- The physical structure of the building:
- The exterior, foundation, and roof must be undamaged
- No sign of insect infestation
- No loose wiring or exposed electrical systems
- Adequate ventilation of attics and crawl spaces
- The livability of the building:
- Working utilities, including electricity, heat, and clean water
- Safe and sanitary sewage disposal
- No lead paint (any chipped pain cannot exist and has to be sanded and painted)
- All fire codes and applicable safety codes are met (carbon dioxide and fire detectors must be installed)
- The property site:
- No soil contaminants or underground storage tanks
- Topography drains water away from the building walls
- Safe and reasonable property access
If during the inspection, the appraiser finds any issues with the above, she or he will make a list. The lender has the ability to allow the seller to fix these issues before closing to satisfy the FHA guidelines. Here is a specific Checklist that can be used:
General Health and Safety
- Foundation or structural defects
- Whether the utilities (water, sewage, heat, and electricity) all work
- Chipped or peeling paint in homes built before 1978
- Incomplete renovations
- Water damage
- If the property is accessible to vehicles, especially emergency vehicles
- Exposed wiring and uncovered junction boxes
- Whether the house is too close to outside hazards, such as a leaking oil tank or a waste dump
- Excessive noise, such as being close to an airport
- Missing handrails
Exterior
- Leaky or defective roof and holes in the siding
- Leaning or broken fencing
- Doors that don’t properly open or close
- Condition of gutters, chimney, stairs, railings, and porches
- If swimming pools are up to code
Every Room
- Whether each room has electricity
- Whether each room has a window or door to the exterior to be used as a fire escape
Kitchen
- Missing or broken appliances usually sold with a home, including stove and refrigerator
- A broken or leaking sink
Bathrooms
- Broken or leaking toilet, sink, or tub/shower
- No ventilation (either an exhaust fan or window)
Crawl space or basement
- Basement moisture
- Evidence of past or present standing water
Heating and Plumbing
- Inoperable HVAC
- Major plumbing issues and leaks
These are some common items an FHA appraiser looks for, but other issues that might make a house unsafe could keep it from passing. An FHA appraisal is not the same as an independent home inspection. It’s still a good idea to get a separate home inspection to make sure you’re making a wise investment!
