Articles Tagged With: Appraiser

February 14, 2018

Can I Get A Second FHA Appraisal If I Don’t Agree With The First One?

A common question some newcomers to the home buying process ask; “Can I get a second FHA appraisal if I don’t agree with the first one?” FHA loan rules anticipate situations like these. Some borrowers or sellers don’t share the opinion of the appraiser for a variety of reasons; some may simply wish to have the home appraised again to see if the results are more advantageous. But FHA loan rules don’t allow a second appraisal simply for the purpose of getting a different result. HUD 4000.1, the FHA loan handbook, instructs the lender on how she may proceed with a second FHA appraisal request. For example, page 128 of HUD 4000.1 states clearly, “The Mortgagee is prohibited from ordering an additional appraisal to achieve an increase in value for | more...

What Credit Score Is Needed For An FHA Mortgage?

February 9, 2018

Can I Request An Appraisal Update For An FHA Mortgage?

By Bruce Reichstein

Can I request an appraisal update for an FHA loan? The FHA appraisal expiration issue is one that won’t affect all borrowers, but when it does become an issue, it’s good to know what the FHA loan rules are; in general FHA appraisals have a 120 day validity window, with an option for a 30-day extension. The 30-day extension is, as we discussed in a previous blog post, addressed in the FHA loan handbook as follows: “The 120 Day validity period for an appraisal (see Ordering Appraisals) may be extended for 30 Days at the option of the Mortgagee if (1) the Mortgagee approved the Borrower or HUD issued the Firm Commitment before the expiration of the original appraisal; or (2) the Borrower signed a valid sales contract prior to | more...

February 8, 2018

When Does My FHA Appraisal Expire?

By Joe Wallace

When does my FHA appraisal expire? It’s a question that not all borrowers find themselves of need of answering, but there are cases where there may be unexpected delays trying to get to loan approval or a closing date. Some borrowers get nervous about issues like appraisal expiration. Should they be? General FHA Loan Rules Governing The Age Of Loan Documents In general, there’s a basic expiration for FHA loan documents except for “evergeen” paperwork submitted as part of the loan package such as supporting documentation for divorces, alimony payments, tax documents, and related information. HUD 4000.1 says of the general age of loan documents, “Documents used in the origination and underwriting of a Mortgage may not be more than 120 Days old at the Disbursement Date. Documents whose validity | more...

January 29, 2018

What You Need To Know About FHA Home Loan Appraisals

By Joe Wallace

What you need to know about FHA home loan appraisals includes the difference between an appraisal and an inspection, and what the appraiser looks for when spotting defective conditions and why. The most important thing to know overall about an FHA home loan appraisal is that the appraisal is not a tool for the borrower to use to determine whether the house is suitable; the appraisal is a tool for the lender to establish the fair market value of the home. Do not rely on the appraisal to tell you the home is in acceptable condition, it was not designed to do this no matter how it may seem from the appraisal report. The borrower-arranged home inspection is the best way to “test drive” a home to see if it | more...

December 26, 2017

FHA Loan Rules: Appraisal Standards And Building Code

By Bruce Reichstein

Do you know the FHA loan rules for appraisal standards and compliance with building code? As a borrower, you may not need to know every single aspect of the FHA loan rules for appraisals, but understanding the basic concepts can help you make a more informed decision when it’s time to choose a home and a home loan. FHA Appraisal Rules: Some Basics The FHA appraisal is a tool for your lender to establish the fair market value of the property and to establish the adjusted value of the home for purposes of setting the loan amount. The appraisal is not a complete, in-depth, top-to-bottom inspection of the property and should never be used by the borrower as such. Only the optional, borrower-arranged and borrower-paid home inspection can do this. | more...

December 20, 2017

What FHA Appraisal Issues Should I Know About?

By Bruce Reichstein

What FHA appraisal issues should I know about? That’s a question that likely doesn’t get asked enough, but the answers can help you make a more informed choice when buying a home. FHA Appraisal Rules For The Living Unit The FHA loan handbook spells out several basic requirements for the living unit which include (but may not be limited to) the following guidelines-the lender is required to insure each home has the following: -a continuing and sufficient supply of safe and potable water under adequate pressure and of appropriate quality for all household uses; -sanitary facilities and a safe method of sewage disposal. Every living unit must have at least one bathroom, which must include, at a minimum, a water closet, lavatory, and a bathtub or shower; -adequate space for | more...

November 30, 2017

What Are The FHA Appraisal Rules For Mobile Homes?

By Bruce Reichstein

What are the FHA appraisal rules for mobile homes? FHA mortgages are available for mobile, manufactured, and modular homes the same as for “stick built” housing such as a typical suburban home. What are the basic appraisal requirements for mobile homes? FHA loan rules for appraisals are found in HUD 4000.1, the FHA loan handbook. There we learn that mobile homes have some unique appraisal requirements. Like condo loans, there are extra rules due to the unique nature of mobile homes. FHA Mobile Home Minimum Size Requirement For example, in HUD 4000.1, we find no minimum square footage requirement for a stick-built home or a condo. But for mobile homes, FHA appraisal requirements include a minimum 400 square feet of floor space. Anything less does not meet the FHA loan | more...

November 9, 2017

Does The FHA Have An Inspection Checklist?

By Bruce Reichstein

Does FHA have an inspection checklist? The question is a popular one, but it reveals a common misconception about the nature of FHA appraisals. It is one that’s extremely important to clarify-the FHA appraisal is NOT a home inspection and shouldn’t be considered one. The FHA Appraisal Is A Tool For The Lender, Not The Borrower In spite of the fact that an FHA appraiser is required to insure the property to be purchased with an FHA home loan meets minimum standards, the real usefulness of the appraisal is NOT for the borrower. The lender uses the appraisal to determine the fair market value of the home and that purpose should be considered its’ primary end result. That means the FHA appraisal is NOT a stamp of FHA approval, or | more...

October 25, 2017

What Are The Minimum Property Standards For An FHA Loan? Part Two

By Joe Wallace

What are the minimum property standards for an FHA loan? We discussed some of the basics in a previous blog post. Now let’s examine what the FHA loan rule book, HUD 4000.1, has to say about the minimum requirements for a home to be purchased with an FHA mortgage. HUD 4000.1 instructs the lender, “The Mortgagee must underwrite the completed appraisal report to determine if the Property provides sufficient collateral for the FHA-insured Mortgage.” “The appraisal and Property must comply with the requirements in Appraiser and Property Requirements for Title II Forward and Reverse Mortgages. The appraisal must be reported in accordance with Acceptable Appraisal Reporting Forms and Protocols.” But the rules get more detailed in this area: “The Mortgagee must confirm that the Structure of the Property will be | more...

October 25, 2017

What Are The Minimum Property Standards For An FHA Loan?

By Bruce Reichstein

What are the minimum property standards for an FHA loan? The short answer is that there is no short answer. FHA home loan rules in HUD 4000.1 require a home to be safe, habitable, and have a “remaining economic life” that will last through the entire term of the mortgage. FHA appraisals are designed to insure these minimum standards are met, but what ARE these standards? FHA Appraisals Are A Tool For The Lender The FHA appraisal is required by HUD 4000.1 to be performed by an independent, qualified fee appraiser who will physically review the property. The appraiser must look at a variety of areas on the property but is not required to step onto the roof, be an expert in electrical or HVAC systems, etc. This means that | more...