Articles Tagged With: FHA Appraisals

August 10, 2011

“Special” Property Requirements For FHA Loans

Many of the most frequently asked questions about FHA home loans involve issues related to property requirements. Some borrowers are told by the lender or appraiser that a particular condition must be fixed before the loan can be approved. The borrower sometimes wishes to dispute such requirements, asking where in the FHA rules it specifically states that “condition X” must be addressed in order for the loan to proceed. But not every situation a borrower is likely to encounter is specifically addressed by a line in the FHA rulebook. What some don’t understand is that the FHA does not anticipate every housing issue with a rule addressing that condition. Instead, the FHA rules are designed to defer to local building codes, plus state or local laws where applicable. That’s not | more...

August 2, 2011

FHA Home Loans, Appraisals, and Mold

By Joe Wallace

When looking for a home to purchase with an FHA loan, some borrowers find themselves in a situation where the results of the appraisal recommend mold abatement. Some potential borrowers challenge the mold abatement requirement–you can find many Q&A forums on real estate issues where posters have stated, “I’ve searched and did not find any documents that say that FHA requires mold to be remediated.” FHA standards for homes to be purchased with an FHA insured mortgage loan include a requirement that the property be free from defects and conditions which could affect the health or safety of the purchaser. A borrower may not find a “chapter and verse” type statement saying “Mold abatement is required”, but the health and safety clauses built into FHA loan regulations can and do | more...

August 2, 2011

FHA Disaster Assistance Announced For Kentucky, Wyoming, and New Hampshire

By Joe Wallace

2011 will likely go down in history as the “year of the storm,” if press releases from the FHA and HUD are any indication. Recent FHA announcements on the latest areas affected by storm and flood damage include press releases detailing FHA assistance for Kentucky, Wyoming, and New Hampshire. According to the FHA, federal disaster assistance is on the way in these areas to provide support for homeowners–including those with FHA mortgages. HUD Secretary Shaun Donovan is quoted in a recent FHA press release, saying “Families who may have been forced from their homes need to know that help is available to begin the rebuilding process…” Donovan added, “Whether it’s foreclosure relief for FHA-insured families or helping these counties to recover, HUD stands ready to help in any way we | more...

July 28, 2011

FHA Loans, the Fair Housing Act, and Discrimination

By Joe Wallace

Elsewhere on this blog, we’ve mentioned the policies of the FHA, Department of Housing and Urban Development, and federal law designed to protect borrowers from discriminatory practices in real estate lending and related areas. FHA home loans are, by federal law and program requirements, intended to be available to all qualified applicants regardless of race, color, national origin, religion, sex, familial status or disability. But some people still don’t understand the full implications of these laws, which extend to rentals and homeowners associations, not just the lending process. A July 20, 2011 press release from HUD describes charges against a Wisconsin landlord accused of violating the Fair Housing Act by “allegedly establishing different terms for a single mother

July 27, 2011

FHA Roof Requirements

By Joe Wallace

One frequently asked questions about the FHA loan process is about roof requirements. When a buyer views a home and decides to make a commitment to buy using an FHA insured mortgage, the sale of the home cannot proceed until the property has been reviewed by an FHA approved fee appraiser. It’s the appraiser’s job to look over the home, make sure it meets FHA standards, and assign it a fair market value. FHA standards include making sure the property is safe, livable, and has no obvious structural issues or defects within the scope of the appraisal. (An appraisal is not a home inspection and borrowers should never accept an appraisal as a guarantee that the home is defect-free.) That includes the roof–FHA and HUD regulations say it must not | more...

July 27, 2011

FHA Condo Loans: Who Approves the Condos?

By Joe Wallace

FHA loan applicants looking for a condo loan have several options open to them when it comes to finding a project that is FHA-approved. The Department of Housing and Urban Development along with the FHA maintain a list of approved condo projects eligible for FHA loans, which is searchable by city, state, and other factors. You can find that list here: https://entp.hud.gov/idapp/html/condlook.cfm But is the existing list the only resource FHA borrowers have to find a condo project? What if the buyer finds a suitable condo that is not yet FHA approved? Thanks to the Housing and Economic Recovery Act (HERA) of 2008, changes have been made to the FHA condo project approval process, effective for all case numbers issued after December 7, 2009. According to the official site, “FHA | more...

July 22, 2011

FHA Loans and Appraisals: Who Sets the Appraisal Fee?

By Joe Wallace

The appraisal process is one of the most important steps toward buying a home with an FHA-insured mortgage. Borrowers cannot be approved for an FHA loan without the FHA appraiser doing his or her work to establish fair market value of the property and make sure the home meets FHA requirements. Like almost everything else in the FHA insured loan process, there are rules and regulations that guide appraisers, the lender who hires them, and how the work is to be done. One area the FHA is quite clear about in the rules is the appraisal fee. FHA does not have a fee structure or table for appraisers–there are no fixed dollar amounts for appraisal services. But that does not mean the FHA doesn’t have rules covering how high these | more...

July 21, 2011

FHA Loans And Appraisal Expiration Dates

By Joe Wallace

When a buyer finds a home to purchase using an FHA insured mortgage, the property must be appraised to establish the market value and make sure the home meets FHA standards before the loan can be approved. Once the home has been appraised and approved for sale, the borrower and lender can work out an agreed closing date. But FHA appraisals have an expiration date–they don’t remain valid indefinitely due to housing market changes and other variables. One common question about the appraisal process is whether the FHA allows an appraisal to be extended if it expires prior to the closing date. The short answer is that the appraisal may be extended for thirty days to allow the loan to close, “If a sales contract is signed or the borrower | more...

July 18, 2011

FHA Loans For Manufactured Homes: For New Models Only?

By Joe Wallace

Not all FHA loans have the same rules or requirements. There are different rules for FHA-insured new purchase home loans for existing construction properties, condo projects and manufactured homes. For example, house hunters may encounter no age restriction on many new purchase home loans when it comes to typical suburban homes or condos–as long as the property meets FHA standards and the lender is willing to approve the loan. That’s not necessarily true for FHA mortgages on manufactured homes. FHA rules state that manufactured homes are only eligible if they have been built after June 15, 1976. FHA rules for manufactured homes also include a space requirement. “Manufactured homes are homes built as dwelling units of at least 320 square feet in size with a permanent chassis to assure the | more...

July 15, 2011

Verifiable Income Rules For FHA Borrowers Between Jobs

By Joe Wallace

FHA loan applications require the borrower to submit information on past and current employment including gross income, how long the job has lasted, and other details. This data is not accepted at face value by the lender; the FHA requires the loan officer to verify sources of income to make sure they are legitimate and acceptable.