Articles Tagged With: FHA Appraisal Rules

December 26, 2017

FHA Loan Rules: Appraisal Standards And Building Code

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 29, 2017

Appraising the Foundation and Basement: FHA Loan Standards

By Bruce Reichstein

What are the FHA loan standards for appraising the foundation and basement of a home to be purchased with an FHA mortgage? The FHA appraisal process is designed to insure that specific standards in this area are met. When problems are detected in an appraisal, they are noted for correction or other appropriate action. The appraisal process covers everything from the electrical system to the roof-the home and its various systems must be within a certain range of good repair and sustainability. For example, there can’t be exposed wiring in the home that would pose a hazard to the future occupants. The roof must not leak or otherwise allow moisture to enter the house. When it comes to the standards for foundations and basements, the FHA has a clear set | more...

Credit Scores For An FHA Home Loan: When Low Credit Is Not Bad Credit

November 28, 2017

What Are the FHA Loan Requirements For Sewer/Septic Systems?

By Joe Wallace

What are the FHA requirements for sewer/septic systems? Some borrowers want to know if the property they’re interested in purchasing with an FHA mortgage loan will qualify if there is a septic tank on the property. Others want to know specific required distances from a septic tank to the property line or related requirements. For example, a septic tank, under FHA appraisal rules, must be at least 50 feet from a well, where applicable. FHA loan rules in HUD 4000.1 require a property to meet minimum appraisal requirements before a loan will be approved. Some issues cannot be fixed, but other situations may be repaired or corrected. When a property can be modified, repaired or improved to meet those standards, FHA rules allow the loan to happen with the corrections | more...

November 22, 2017

What Are The Property Requirements For An FHA Home Loan?

By Joe Wallace

What are the property requirements for an FHA home loan? There are some basic minimum standards listed in HUD 4000.1 that can help future FHA loan applicants understand the basics, but it’s important to remember that local building code, health standards for water and sewage, and other regulations may also apply. General FHA Loan Requirements For Homes To Be Purchased With An FHA Mortgage HUD 4000.1 states that it is the lender’s responsibility to make sure “each living unit” has the following features as required in HUD 4000.1: -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, | more...

Is U.S. Citizenship Required For An FHA One-Time Close Construction Loan?

November 13, 2017

FHA One-Time Close Construction Loan Rules: Utilities

By Joe Wallace

FHA loan rules for One-Time Close / Single-Close construction loans include a set of requirements the finished property, which must meet both state/local building code and FHA loan minimum property standards. Those FHA standards include a set of requirements for access, utilities, and water quality which must be met as a condition of loan approval. It’s surprising to some FHA loan applicants that certain features of a new construction home are A) regulated and/or B) allow things like septic tanks or wells. But not all properties are the same, and some construction issues are present in some housing markets that aren’t a consideration elsewhere. Well water is a great example. When a resident of a large metropolitan areas thinks of a new construction home, it’s likely that issues surrounding wells | 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 26, 2017

What Are The Property Requirements For An FHA Loan?

By Bruce Reichstein

What are the property requirements for an FHA loan? There are standards listed in the FHA loan handbook, HUD 4000.1, that all buyers should know. The ability to purchase a home with an FHA mortgage is determined by your credit rating, debt to income ratio, employment, and related factors. But the ability to purchase a specific home will also include standards for the property itself; standards which must be met by the home as-is, or brought into compliance as a condition of loan approval. Basic FHA Loan Property Requirements: Location According to HUD 4000.1, the home must be located within the continental United States, its’ protectorates or territories. A home is eligible to be considered for an FHA loan if it is located in one of the following areas listed | 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...