Articles Tagged With: FHA Inspection

December 29, 2023

Home Buying Facts You Should Know

Are you buying a home for the first time? Do you need answers to mortgage loan questions? You aren’t alone. We explore some important issues below. FHA Home Loans For First-Time Home Buyers Feature A Lower Down Payment Lower down payments mean more money freed up to pay closing costs and other expenses related to buying a home. But if you plan on keeping the home for a large portion of the loan term (or the entire loan term), a bigger down payment may be to your advantage. The smaller your principal loan amount, the less you will pay in interest over the lifetime of the loan. Home Loan Appraisals Should Not Be Used By The Borrower To Determine The Condition Of The Home Ask any realtor or lender what | more...

March 11, 2019

First-Time Home Buyer Advice: Get A Home Inspection

By Bruce Reichstein

Some wonder if they have had a home inspection when the FHA appraisal results come back. First-time home buyers should know that a home inspection is something that should be done regardless of the appraisal because the two procedures are quite different. The appraisal is not a tool for the borrower and will not give you an idea of the true condition of the home. The home inspection is the job that needs to be done to give you that information. The FHA itself publishes a pamphlet called “For Your Protection, Get A Home Inspection” which includes this advice; “You have the right to examine carefully your potential new home with a professional home inspector. But a home inspection is not required by law, and will occur only if you | more...

September 7, 2018

FHA Home Loans, Appraisals, And Home Inspections

By Joe Wallace

FHA home loans require an appraisal in order to insure the property meets minimum FHA requirements. The appraisal also helps the lender set the loan amount based on the adjusted value of the home. Some borrowers are tempted to skip the optional home inspection process and simply go with the FHA appraisal. This is a bad idea because doing so basically results in buying a home and making a large investment without knowing the true nature of the property’s condition. There are some questions you can ask yourself to help better understand why a home inspection is needed; learning the answers to these questions can definitely change your mind about the temptation to skip a home inspection. How Does The Buyer Know If There Is A Roof Problem? Can you | more...

February 13, 2018

What Can Affect An FHA Appraisal Or Inspection?

By Bruce Reichstein

What can affect an FHA appraisal or an FHA-required inspection? There are many factors that might influence the outcome of these procedures. For example, borrowers who are having a home custom-built using an FHA One-Time Close construction loan will learn about appraisal requirements that include noting the proximity of the project to gas stations, power lines, and other safety-related issues. The rules that instruct the lender and appraiser in these areas can be found in the FHA loan handbook, HUD 4000.1. Airport hazards, slush pits, and operating oil wells are just some areas the appraiser will note where applicable. For projects classified as New Construction under FHA loan rules, the appraiser must note the general environmental conditions of the area of the construction project and adjacent areas. According to HUD | 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...

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 7, 2017

2017 FHA Loan Home Requirements

By Bruce Reichstein

What are FHA loan home requirements? How can you tell if a property meets FHA loan minimum standards? These are important questions to ask when planning for your new home loan. FHA loan home requirements are found in HUD 4000.1, the FHA single-family home loan handbook. HUD 4000.1 states that while all homes to be purchased with an FHA mortgage must pass the FHA appraisal process, doing so in no way acts as a guarantee that the home is free of defects. A borrower should understand that the FHA appraisal is for the lender, while a home inspection (optional but extremely important) is for the borrower. In general, FHA loan home requirements include rules which state that the roof must be in good repair, that the electrical and plumbing system | more...

August 10, 2016

FHA Loan Questions: Appraisal Issues

By Joe Wallace

A reader asks, “We just purchased our first home using an FHA loan. After 2 months in the house we had a typical Arizona monsoon storm come through. Our home flooded due to poor drainage on 3 sides of the house. The grading slopes towards the structure and not away. There are no gutters on the home nor a drainage system to move the pooling water away from our home. What recourse do we have when the FHA approved appraiser reported that there are no problems with the grading and drainage? Our home is damaged and our insurance does not cover flood damages.” The FHA official site is clear on the subject of FHA appraisals in that the appraisal process is not meant to be a home inspection. The appraisal | more...

April 5, 2016

Understanding FHA Appraisals

By Joe Wallace

Whether you’re purchasing a suburban home, a town home, manufactured home or condo, all properties must be appraised before the loan can be approved. The appraisal process and its requirements may vary depending on whether the home is under construction, is considered new construction, or is termed “existing construction”, but in all cases the property must meet minimum FHA standards also know as MPRs and MPS. HUD 4000.1 explains the appraisal process: “The Appraiser must observe, analyze and report that the Property meets HUDs MPR and MPS. Minimum Property Requirements (MPR) refer to general requirements that all homes insured by FHA be safe, sound, and secure. Minimum Property Standards (MPS) refer to regulatory requirements relating to the safety, soundness and security of New Construction.” “Every Property must be safe, sound, | more...

November 13, 2015

HUD 4000.1 Appraisal Rules: Required Repairs

By Joe Wallace

FHA loan appraisal rules found in HUD 4000.1 give the lender specific instructions on how to proceed with an FHA loan during the appraisal process. HUD 4000.1 has some very specific language that can help a borrower understand key issues surrounding FHA mortgage loans, including why an FHA appraisal should not be mistaken for a “home inspection” nor used in place of one. The FHA appraisal is carried out to make sure the home meets minimum standards, and where a home does not, require minimum repairs or corrections to the property to bring it up to minimum standards. According to HUD 4000.1: “As the on-site representative for the Mortgagee, the Appraiser provides preliminary verification that a Property meets the Property Acceptability Criteria, which includes HUDs Minimum Property Requirements (MPR) and | more...