July 13, 2016
FHA loans, like their conventional counterparts, have closing costs, fees, and expenses all borrowers will need to budget and save for. One such fee is the FHA appraisal fee.
The video above helps explain the appraisal fee, but there are some common issues related to appraisals you should also keep in mind. One is that sometimes appraisals require corrections as a condition of loan approval. And that can require a follow-up known as a compliance inspection.
Compliance inspections, where required, also come with a fee. This fee is for services rendered and must be paid regardless of the outcome. The same is true of your appraisal fee-the service provided by the professional is what the fee is for, so the outcome of the appraisal is a separate issue altogether.
Borrowers should know that both appraisal fees and compliance inspection fees vary from place to place, so there is no set flat fee that can be quoted here. You’ll find that the fee can be affected by whether or not the FHA appraiser must travel long distances to perform the work, the location of the housing market, etc. The FHA and HUD do not set or regulate these fees.
Borrowers should anticipate the expense of the compliance inspection fee, just in case. Budgeting and saving for this cost is wise even if you wind up not having to pay for a compliance inspection.
It’s also critical to remember that an FHA appraisal is NOT a home inspection, nor does a property “passing” the appraisal process mean that it is free of defects or has some kind of FHA stamp of approval. The appraisal is NOT designed to be a complete, top-to-bottom inspection of the property for defects or problems; the appraisal is only designed to make sure the property meets MINIMUM standards and establish the fair market value of the home.
You should never purchase a home or commit to purchasing a property without paying for the optional (but extremely important) home inspection. The FHA and HUD official site make it clear that FHA appraisals are NOT inspections and the FHA/HUD cannot be held responsible for borrowers who purchase without paying for a home inspection.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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