June 8, 2015
When you are ready to commit to buying a home with an FHA mortgage, one of the big steps toward making that happen is the appraisal process. Borrowers sometimes confuse FHA appraisals with a home inspection, but the appraisal is not a complete, top-to-bottom review of the home. A property may be appraised and approved for the loan, but still contain issues unknown to the borrower. That is why a home inspection is so important.
How does the appraisal process work? An assigned FHA approved appraiser comes to the home and personally walks through it, noting any obvious defects in workmanship, code compliance issues, and other things that could require attention as a condition of FHA loan approval.
Sometimes there are no issues and the home “passes” the FHA appraisal process. But that should never be misinterpreted as a stamp of approval from the FHA stating that the home is fit for the borrower and problem-free.
An FHA appraiser is not required to be an expert in every part of the home–plumbing, heating, roof issues and other problems may or may not be detected. The appraiser is not, for example, required to physically step onto the roof of the home. That is why you should hire a home inspector after the appraisal–the inspector WILL step onto the roof, examine the plumbing up close, etc.
If an FHA appraisal happens and there are issues that require attention, the appraiser must determine whether or not the issues are repairable or not. In cases where the problems can be fixed, the appraiser will recommend fixes or corrections that usually must happen before the loan closes. Those corrections would require a compliance inspection which the borrower will also have to pay for in addition to the original appraisal.
There may be some minor instances where fixes can, with the agreement of the lender, be delayed until after loan closing, but those situations would be handled on a case-by-case basis by your lender.
Do you have questions about FHA home loans? Ask us in the comments section.
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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