Articles Tagged With: FHA Appraisal Rules

June 15, 2018

When Is An Appraisal Required For My FHA Mortgage Loan?

When is an appraisal required for an FHA home loan? This important question often comes up when borrowers want to refinance a home using an FHA refinance loan such as cash-out refinance, FHA Streamline Refinance, or even when the borrower wants to apply for an FHA Reverse Mortgage. Appraisals are required for most FHA loan transactions-you will always have to pay for an appraisal for an FHA forward mortgage, which is the kind of loan you will apply for when purchasing a new home. Appraisals are required for both existing construction loans and FHA One-Time Close construction loans, though the process will vary for construction loans due to the nature of the transaction. Appraisals will also be required for FHA Rehab loans. The appraisal is intended to establish the fair | more...

June 14, 2018

FHA Home Loan Questions And Answers About The Appraisal Process

By Joe Wallace

The FHA loan appraisal process is potentially confusing to a new borrower. If you are serious about purchasing a specific property with an FHA mortgage, the appraisal is an important step in the loan approval portion of your house hunting experience because it tells the lender whether the property is suitable for an FHA mortgage. What Is The FHA Appraisal And What Does It Do? FHA appraisals are performed when you want to purchase a specific property with a home loan. The appraisal is not done for a house you are “just looking” at; this process is reserved for the home you specifically want to buy. An FHA approved appraiser, assigned by your lender, will come to the property and give it a general review. This process is not as | more...

May 25, 2018

FHA Home Loan Rules For New Construction Appraisals

By Joe Wallace

Borrowers who are interested in having a home built for them from the ground up using an FHA construction loan such as an FHA One-Time Close mortgage or any other type of FHA-guaranteed mortgage loan may wonder what the rules are for appraisals. After all, existing construction appraisal processes are for a home that is ready to sell (although the process may vary if the borrower is applying for certain types of rehab loans). While the appraisal requirements may be generally the same-the home must be safe, habitable, and have an economic life for the entire duration of the mortgage-there are procedural issues that affect new construction properties. With that in mind, appraisals on new construction run a bit differently in some procedural ways than existing construction mortgages; with the | more...

May 21, 2018

FHA Loans, Wells, And One-Time Close Construction Loans

By Bruce Reichstein

Borrowers who apply for FHA loans may not be clear on whether or not a property served by a well instead of being connected to the local utility is eligible for an FHA mortgage. Is the presence of a well a problem for FHA loan approval? And what about FHA loan standards for FHA One-Time Close / Single-Close construction loans? HUD 4000.1 contains guidelines for these issues including the acceptability of a property served by a well instead of a water utility. Borrowers will be relieved to know that FHA mortgage rules do not automatically rule out a property just because a well is present, but that well must meet both FHA minimum requirements and any applicable health code or other local ordinances. For One-Time Close / Single-Close construction loans, | more...

May 15, 2018

FHA Loan Rules For Appraisals: What Borrowers Need To Know

By Joe Wallace

What do borrowers need to know about FHA loan appraisal rules? We field reader questions every month that include queries about the appraisal process and whether or not a certain type of condition is permitted in a home to be purchased with an FHA mortgage. Some recent reader questions go along these lines: “Is an unfinished basement acceptable in a home I’m buying with an FHA mortgage?” “Does the garage have to be wired for electricity in order to be approved for an FHA loan? and, “The home I want to buy is served by a well instead of being connected to a local utility. Is this permitted?” There are some FHA loan rules for appraisals that may address some or all of these issues, but there’s a very important | more...

April 18, 2018

Switching FHA Lenders, Part 2

By Bruce Reichstein

In our previous blog post, we discussed borrowers who need to know FHA home loan rules for switching lenders, and when a new appraisal might be permitted under such circumstances. Borrowers do have the right to change lenders, the same way they have the right to refinance a mortgage loan using the same lender or a new one. If you need an FHA One Time Close construction loan, appraisal issues are quite different. The FHA will require inspections of the finished property to insure it complies with FHA standards and state/local code, but obviously the approach to a new construction home isn’t the same as an actual appraisal to determine the fair market value of existing construction properties. But for those who need a new purchase loan on an existing | more...

April 18, 2018

What You Need To Know When Switching FHA Lenders

By Joe Wallace

There are several reasons why a borrower might decide to switch FHA lenders during a home loan transaction. In cases where the switch happens, borrowers should know certain FHA guidelines that can affect the transaction-especially if an appraisal has already happened. Some borrowers think about switching lenders because they have had an unsatisfactory experience. Others may simply be offered a better deal. But there are some instances where the borrower is tempted to switch lenders because of an appraisal issue-namely that the appraisal did not value the property as expected. In such cases, when a borrower is tempted to get a new lender and a new appraisal, what should be known about that process? The first thing borrowers should know is that new FHA appraisals are not possible simply because | more...

April 9, 2018

FHA Loan Appraisal Tips

By Joe Wallace

FHA loan appraisal tips can be hard to come by if you are a first-time home buyer and aren’t even sure about the right questions to ask. Do you need to clear up any confusion over the FHA appraisal? Keep reading, you’ll learn that the appraisal process is more simple and straightforward than it may appear at first glance. FHA Appraisals Are Ordered For The Home You Wish To Purchase That may seem alike a simple and obvious fact if you have some experience with the home loan process, but some borrowers might not realize that the appraisal stage of the mortgage comes when you find a home you are serious about buying. You won’t need to know the actual fair market value of a home that you’re just “window | more...

April 3, 2018

More FHA Refinance Loan Tips

By Joe Wallace

There are many FHA refinance loan tips you should know when planning and saving for your new loan. Refinance loans guaranteed by the FHA feature fixed or adjustable rates, can offer cash back to the borrower, and also come as a no cash-out option for both FHA and non-FHA mortgages. FHA Refinance Loans Have No Down Payment, But Do Have Closing Costs You won’t make a down payment on an FHA refinance loan, but there are associated closing costs with the loan you will need to budget and save up for. The LTV for an FHA refinance loan varies depending on the type of refinancing you seek; talk to your lender about the expenses associated with your refinance loan so you can save accordingly. FHA Loans Do Not Require Private | more...

March 29, 2018

What You Should Know About FHA Home Loan Appraisals

By Joe Wallace

What you should know about FHA home loan appraisals includes understanding the difference between one and a home inspection. You should also know that the appraisal serves as a tool for the lender to establish the fair market value of the home compared to similar ones like it in the area. The FHA appraisal is affected by state and local laws, building code, and more. FHA Appraisal Requirements For Safety And Habitability FHA loan rules for the appraisal process in HUD 4000.1 state, “As the on-site representative for the Mortgagee, the Appraiser provides preliminary verification that a Property meets the Property Acceptability Criteria, which includes HUD’s Minimum Property Requirements (MPR) and Minimum Property Standards (MPS). Minimum Property Requirements refer to general requirements that all homes insured by FHA be safe, | more...