August 21, 2017
Are FHA appraisals the same thing as home inspections? We’ve fielded a few reader questions this week about this issue, and it is very important for borrowers to fully understand why they should budget and save for the optional home inspection in addition to an FHA appraisal (which is not optional).
FHA appraisals are NOT the same as home inspections. Appraisers and home inspectors will approach the same property with different intentions and procedures. The FHA appraisal will never give a borrower an informed look at the home the way the home inspection is designed to; the shortest way to address this issue is to state that appraisals are for lenders, home inspections are for borrowers.
Even if a property makes it all the way through the appraisal process with either no corrections/repairs needed or very few required, there is no way for the borrower to make a truly informed decision about buying the home without a home inspection.
The FHA/HUD official site includes a publication titled, “For Your Protection, Get A Home Inspection” which declares that the FHA cannot guarantee the home to be purchased with an FHA mortgage is defect-free.
Nor will the FHA provide recourse for borrowers who purchase homes without getting them inspected, but later discover faults or defects in the property.
The FHA official site states clearly, “It is your responsibility to be an informed buyer. Be sure that what you buy is satisfactory in every respect. You have the right to carefully examine your potential new home with a qualified home inspector. You may arrange to do so before signing your contract, or may do so after signing the contract as long as your contract states that the sale of the home depends on the inspection.”
Home inspections do cost money, and this is an expense borrowers should research and plan to save up for in the year leading up to the home loan application.
Buying a home without getting it inspected leaves the borrower vulnerable to a host of issues, and the FHA appraisal process was never designed to catch any/all problems that might be lurking undetected for the appraisal process.
The FHA and HUD have the final say on this issue with the following from their official site:
“If you find problems with your new home after closing, FHA can not give or lend you money for repairs, and FHA can not buy the home back from you. That is why it is so important for you, the buyer, to get an independent home inspection. Ask a qualified home inspector to inspect your potential new home and give you the information you need to make a wise decision”.
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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