Articles Tagged With: Appraiser

April 26, 2011

Rules Governing FHA Loan Fees

In recent blog posts we’ve discussed the fact that the FHA does not set interest rates on the loans it insures. Forces in the marketplace already determine the state of housing market interest, for the FHA to get involved in setting rates for FHA-guaranteed loans would involve a whole new layer of effort and study to keep up with ever-changing market conditions. Instead, the FHA allows lenders and borrowers to negotiate the rates. What the FHA does do is to control the fees and charges associated with an FHA loan. FHA rules state fees and costs must be “reasonable and customary”. For example, FHA rules allow the lender to collect an origination fee. For loans through the end of 2009, the fee was limited to one percent. The one percent | more...

March 18, 2011

FHA Loans and Home Inspections

By Joe Wallace

Once an FHA appraisal has been completed and a borrower is informed

March 14, 2011

FHA Appraisals and Required Inspections

By Joe Wallace

In our last blog post we discussed FHA appraisals and when an automatic inspection is not required in cases such as wells or possible termite problems. A change in the rules in 2005 dropped the requirement for automatic inspections for termites except as required from the local or state authority. Well water issues were similarly changed except where governed by state or local law or the presence of qualifying factors such as nearby industry or agriculture. But in some cases automatic inspections are required no matter what. Any condition that could be a danger to the FHA loan applicant once they move in must be reported and an inspection of the property must be conducted if the buyer wants to move ahead with the sale. According to FHA requirements, “…the | more...

March 14, 2011

FHA Rules for Automatic Inspections

By Bruce Reichstein

The FHA has standards for appraisers that mandate an “automatic inspection” if certain conditions are detected. In 2005, the FHA modified some of those policies for existing construction buildings to eliminate an “automatic inspection” requirement. “In a continuing effort to reform and standardize its appraisal requirements, FHA has shifted from its historical emphasis on the repair of minor property deficiencies and now only requires repairs for those property conditions that rise above the level of cosmetic defects, minor defects or normal wear and tear.” The FHA adds, “FHA Roster Appraisers are reminded to report all readily observable property deficiencies…” according to FHA Mortgagee Letter 05-ML-48. Termite inspections, for example, are one area that changed under the new rules for existing construction housing being reviewed for an FHA mortgage loan. The | more...

January 20, 2011

FHA Loans and Non-Residential Use

By Bruce Reichstein

An FHA insured home loan for a single family property has rules that govern the use of the home when it comes to what the FHA defines as "non-residential" purposes. FHA requirements say appraisers must evaluate a property on a square footage basis for homes that have a portion of that footage dedicated to business use. FHA rules say that any home, condo or multi-unit property must use no more than 25% of the square footage for business or non-residential use.

January 18, 2011

FHA Loans: The Inspection

By Bruce Reichstein

FHA home inspections are an important part of the FHA loan process. The home inspection is not mandatory, but a home buyer should never assume that the FHA appraisal was able to spot potential problems with the home. The FHA appraiser comes to establish fair market value and to insure the property lives up to the FHA minimum property standards. The word "minimum" is the key in that phrase, which is why an FHA loan applicant should always hire a property inspector to look at the house before a commitment to buy is made.

January 14, 2011

FHA Appraisal Facts

By Bruce Reichstein

The appraisal process is one of the most important aspects of the FHA loan process. Once the buyer has applied for an FHA guaranteed loan and has established that he or she is a good credit risk, the next phase of the process--finding a suitable home and making an offer--is directly affected by the appraisal system. The rules say an FHA-approved appraiser must view the property to establish the fair market value of the home. But there are a number of issues that the buyer should know about--things that affect the process that have nothing to do with the appraisal itself.

November 15, 2010

Who Selects the FHA Appraiser?

By Joe Wallace

When applying for a loan to purchase a home with an FHA mortgage, the appraisal of that home is one of the most important steps in the process. Without an FHA appraisal, the entire process is stalled after a certain point until the job is done. FHA appraisals require the buyer to anticipate fees associated with doing the work, and the seller must anticipate costs associated with repairing items that could lower the appraised value of the property.