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Articles Tagged With: FHA Inspection

November 2, 2015

FHA Mortgage Loans: Home Inspections And Appraisals

By Joe Wallace

We get many reader questions about the FHA appraisal process that include the phrase “FHA inspection”. But there is no such thing as an FHA “inspection”, there is only an appraisal designed to make sure the property to be purchased with an FHA loan meets minimum standards and establish the fair market value of that property. It’s a mistake to assume that a home that “passes” an FHA appraisal is free from problems or defects. The FHA appraisal is never intended to be a stamp of approval on the home or a guarantee of any kind. That is why the FHA and HUD urge borrowers to pay for the optional but extremely important home inspection as well as the appraisal. The home inspection is something the borrower must schedule and | more...

 

March 17, 2015

More On FHA Appraisals Versus Home Inspections

By Joe Wallace

In our last blog post we addressed a reader question about FHA appraisals and why appraisals are not considered home inspections. This is a very important issue and deserves some extra attention here for one important reason: an FHA appraisal is never a substitute for a home inspection. Borrowers may be tempted to save a few hundred dollars and skip having the voluntary (as in, not required as a condition of the loan) home inspection performed, but doing so is a very bad idea. An FHA appraisal is, as the FHA official site points out, for the lender and addresses the lender’s needs only. A home inspection, which is not required by the lender as a condition of the loan, is for the borrower and is designed to look out | more...

 

September 2, 2014

FHA Loans: Appraisals Versus Inspections

By Joe Wallace

A reader got in touch recently with the following: “I recently purchased a home with foundation issues. It was not required of me to get a home inspection buy the realtor. However it was required of me to get an appraisal by the realtor.” “It is unfortunate for me that I could not be there during the time of the appraisal, the real estate agent was there . It is also unfortunate for me that I did not survey the garage where the damages exist. Is it proper for a licensed real estate agent to sell property without disclosing foundation issues? I also got an FHA Loan to purchase this property.” It is true that FHA appraisals are required, and home inspections are not. However, no borrower should purchase a | more...

 

December 17, 2012

FHA Loan Question: Minimum Property Requirements and “Old Wiring”

By Joe Wallace

A reader asks, “I’m looking to purchase a home though a loan from FHA. The home is old but only occupied by a single family, very nice condition in and out, but has old 100 amp wiring and has a old heating system. No problems with either. Will this affect the process of the purchase?” Questions like these are common, and before we answer it’s important to point out that the FHA itself does not lend money. It guarantees the home loan which is issued by a private lender. We only mention this because some reader questions are worded in such a way that it seems there may be a mistaken impression that FHA actually offers the loan money–it does not. With respect to this reader question, FHA loan rules | more...

 

March 9, 2012

FHA Appraisals Versus Home Inspections

By Joe Wallace

An FHA-assigned appraisal is a required part of the FHA home loan process. This appraisal insures the property being purchased with an FHA mortgage loan meets FHA standards and assigns a fair market value to the property. But the appraisal does not make any guarantees that the home is defect-free. The borrower must pay for a home inspection to get a better idea of the true condition of the property, any hidden or possible defects, etc. FHA loan applicants should definitely plan to pay for both an appraisal and a home inspection–the FHA appraisal is the mandatory expense, but the inspection is technically optional. But it’s an option that should never be passed up. Even though a property has been approved for an FHA guaranteed loan does not mean it | more...

 

October 17, 2011

FHA Property Appraisals Vs. Home Inspections

By Joe Wallace

A recent reader question came in about FHA appraisals. “How do I file a complaint about a lemon home? It was inspected by an FHA approved inspector.” This question raises two very important issues. Does the FHA “inspect” properties? If not, who does? The FHA requires an appraisal before an FHA loan will be approved and can move to closing. The appraisal is designed to insure the property meets minimum standards, is safe and livable, and the appraisal also establishes a fair market value. But an FHA appraiser is not an inspector. The FHA appraisal process is not designed to guarantee the home is free from defects or problems. The appraisal process does not guarantee your home is problem-free. Before a borrower commits to purchasing the home, or as a | more...

 

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...