FHA Appraisal

FHA appraisals are required to meet all of the guidelines set forth by USPAP, the lender and HUD, as well as standard appraisal guidelines. The appraisal is a critical component of an FHA mortgage. What does the FHA appraiser look for during this process? The primary areas of inspection are the roof, the foundation, lot grade, ventilation, mechanical systems, heating, electricity and crawl spaces (when present).

  • FHA 203k
  • USDA

Key inspection areas required by HUD:

  • HUD’s primary concern is the health and safety of the homebuyer who will actually live in the house. Thus, most of their appraisal/inspection checkpoints pertain to health and safety aspects of the property. Above all, the home must be habitable and comfortable, without any potential hazards to the occupant.
  • The lot should be graded in a way that prevents moisture from entering the basement and/or foundation. In other words, the lot should be sloped to allow water to drain away from the house – not toward it.
  • All bedrooms should have egress to the exterior, for reasons of fire safety. A bedroom window will suffice, as long as it’s large enough to allow egress.
  • Many homes built before 1978 still contain lead-based paint, which is a potential health hazard. In these homes, the appraiser will check for damaged paint (peeling, chipping, etc.). Such conditions must be corrected before the loan will go through.
  • All steps and stairways must have a handrail for safety. This is a commonly cited discrepancy during FHA appraisals.
  • The heating system must be sufficient to create “healthful and comfortable living conditions” inside the home.
  • The roof should be in a good state of repair and must keep moisture from entering the home. It should “provide reasonable future utility, durability and economy of maintenance.”
  • The foundation should be in good repair and able to withstand “all normal loads imposed” on it.

For more information, contact us or visit HUD.com.