Articles Tagged With: FHA Appraisals

October 3, 2017

How Long Are FHA Appraisals Valid?

How long are FHA appraisals valid? That can be an important question, especially in situations where there might be a delay in the processing or closing of a home loan for some reason. FHA loan rules governing the appraisal process are found in HUD 4000.1, the FHA loan handbook. In that handbook, there is a general rule for the age of documents used to process the mortgage. According to that section on page 107, we learn: “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 for underwriting purposes is not affected by the passage of time, such as divorce decrees or tax returns, may be more than 120 Days old at the Disbursement Date.” | more...

Who can apply for FHA Reverse Mortgages?

September 5, 2017

What Happens To My FHA Appraisal If I Switch Lenders?

By Bruce Reichstein

What happens to my FHA appraisal if I switch lenders? It does happen-sometimes a borrower starts with one company but decides to switch lenders. There are many reasons why this could happen; a better set of terms and conditions offered elsewhere, a change of mind, etc. It is definitely possible to switch participating FHA lenders before the transaction reaches a certain point, but what if the appraisal has already happened? FHA loan rules found in HUD 4000.1 anticipate such issues, and addresses them starting on page 127, which begins by saying that the lender is required to transfer the appraisal to the new lender within five business days. In cases where a Borrower has switched Mortgagees, the first Mortgagee must, at the Borrower’s request, transfer the appraisal to the second | more...

Should I Consider An FHA Reverse Mortgage?

August 21, 2017

Does The FHA Appraiser Work For The Lender?

By Bruce Reichstein

Does the FHA appraiser work for the lender? That’s what one reader wanted to know this week, writing us to ask: “I read your article about how an FHA appraiser is chosen by a lender but my question is: Is the FHA appraiser an ‘agent’ of the lending company? The reason I ask is two years ago I purchased my first home with an FHA loan. Two weeks after closing my roof leaked. It turns out our house has five layers of roofing on it which is visible to the naked eye from the ground because we have no gutters on the home.” “When I called the FHA resource line I was finally told that the appraiser and his report falls back on the lending company…So now I am wondering | more...

August 21, 2017

Are FHA Appraisals The Same As Home Inspections?

By Joe Wallace

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 | more...

August 10, 2017

FHA 203(k) Fixer-Upper Loans: What About The Appraisal?

By Bruce Reichstein

When you buy a home with an FHA mortgage, it must be appraised to insure the property meets minimum FHA standards. A home to be purchased with an FHA mortgage must be code-compliant, it must not be too close to high voltage lines or high pressure gas pipelines, and there are specific requirements for property located near know natural disaster zones. All of these requirements protect buyers and lenders alike, but there are certain instances where a property would never pass the FHA appraisal, yet borrowers seek mortgage loans for these properties anyway. Consider the borrower who needs a home loan to do rehab or repair work on an existing structure that badly needs it. And what about the borrower who wants to purchase a fixer-upper home, or a property | more...

August 10, 2017

What Is An FHA Appraisal?

By Joe Wallace

What is an FHA appraisal? It’s one of the most important parts of your home loan process when purchasing property with an FHA mortgage. The appraisal is a mandatory review of the property to help the lender establish the fair market value of the home while making sure the property meets minimum FHA requirements. But there’s more to the appraisal, as we’ll learn. The FHA Appraisal Is A Tool For Your Loan Officer Appraisals are not intended to help or inform the buyer as to the condition of the property. Some mistake the FHA appraisal for a home inspection, assuming that the FHA will “approve” or “reject” a home based on its’ condition. The appraisal process is NOT a home inspection. Borrowers who choose not to pay for a home | more...

Time Is Running Out On Exterior-Only FHA Appraisals

July 24, 2017

Where Can I Refinance An FHA Loan? Part Two

By Bruce Reichstein

Where can I refinance an FHA loan? We’ve been exploring FHA refinance topics in recent blog posts, and this common question is definitely an important one. Why? Because depending on your refinance needs, you may need to shop around for a lender who will offer the type of loan best for your financial goals and needs. FHA refinance loans for existing FHA mortgages are sometimes referred to as “FHA-to-FHA refinancing”, which simply means that you’re going from one FHA loan to another. One misconception about refinance loans is that you would need to stay with the original lender in order to refi FHA-to-FHA, but this is not true. You are free to shop around for a new participating FHA lender to refinance your mortgage. You are also free to explore | more...

June 29, 2017

What Is An FHA Loan Appraisal?

By Bruce Reichstein

What is an FHA appraisal? Simply put, it’s a tool used by the lender to make sure the property to be purchased with an FHA mortgage meets minimum standards. It’s also used by the lender to establish the fair market value of the property for the purpose of setting the proper FHA loan amount. FHA appraisals require a trained, impartial professional who is approved by the FHA. The lender and the appraiser do not “work together” in such a way that puts the appraiser in a compromising position by the lender. Instead, the appraiser is selected, she does her work and submits reports that detail the results of the appraisal. How do FHA loan appraisals work? The appraiser must visually inspect the property, noting any defective conditions, building code issues | more...

June 29, 2017

What Is An FHA Loan Inspection?

By Joe Wallace

What is an FHA loan inspection? That is a tricky question to answer because the very phrase “FHA home inspection” implies something that is not true; that the FHA puts a stamp of approval on homes promising the borrower that they are defect-free once “inspected”. There is no such thing as an FHA home inspection. There IS, however, an FHA home APPRAISAL. But borrowers tend to mistakenly assume that the appraisal process is the same thing as a home inspection. These two things could not be further apart. Home Inspections Are Optional, But Very Necessary A home inspection (not an FHA appraisal) is an optional process the borrower is responsible for arranging and paying for and is not associated with the FHA appraisal in any way. The inspection should be | more...

June 5, 2017

FHA Appraisal Problems: A Reader Question

By Joe Wallace

A reader asks, “I had an FHA appraisal and that came down said everything was in good working order, inspection on roof and all windows. Everything said it was old but good. Bought the house, got $5,000 off for repairs but turns out all windows need to be replaced. Roof needs to be replaced, central air unit needs to be replaced (which was done). But windows are all broken, don’t work and roof is leaking, all plywood needs to be replaced…is there anything we can do or is this all on us?” The implication of this reader question is that the reader did not pay for the optional (but critically important) home inspection. We can’t speculate on what actually happened, but all borrowers should know that it is stated FHA/HUD | more...