FHA Appraisal Guidelines Versus Conventional Guidelines
This BLOG On FHA Appraisal Guidelines Versus Conventional Guidelines Was UPDATED And PUBLISHED On January 11th, 2020
Many sellers and realtors prefer selling their homes to buyers who have conventional mortgage approvals versus those that are qualified for an FHA insured mortgage loan.
- In the past, FHA appraisal guidelines were much stricter than conventional loan appraisals
- However, nowadays, FHA appraisals and conventional appraisals are similar
- There are more checklists on FHA appraisals than there are on conventional appraisals
- The Federal Housing Administration will not insure a residential home that does not meet the basic safety requirement of their FHA appraisal guidelines
In this article, we will cover and discuss Appraisal Guidelines On FHA Loans Versus Conventional Guidelines.
Basic Minimum FHA Appraisal Guidelines
An FHA insured residential home must be habitable and in-live in conditions with no building or code violations.
- The property must have accessibility
- Cannot have the encumbrance of an adjoining property via public ways
- In the event, if the residential property is not directly accessible by public ways, there needs to be an easement with the property providing direct access
Pedestrian Access FHA Appraisal Guidelines
All homes must have access to a pedestrian or a motorized vehicle from any public or private street with a surface.
- In the event, if the property is owned privately, the property must be maintained by a homeowners association
- Or by an agreement with other private homeowners
Free Of Health And Safety Hazards FHA Appraisal Guidelines
FHA also requires that the subject property need to be clear of any health and safety hazards such as mold, pollution, radioactive items, lead, asbestos, peeling paint, and other hazards.
- Hazards also include faulty wiring, electrical, plumbing, and heating and air conditioning systems that are visibly noticeable to the FHA appraisal during an inspection
- In the event, if the FHA appraiser finds such hazards on the subject property, the violation in question needs to be corrected and a re-inspection needs to be scheduled
Separation Of Adjoining Buildings
FHA appraisal guidelines also mandate that the subject property’s structures be separated from the adjoining buildings via a wall that is of full height.
- In the event, if the wall is an outer most exterior wall, appraisal guidelines mandate that there should be ample space in between the buildings
- The reason is so that it has enough clearance to be able to perform wall maintenance if required to do so
FHA appraisal guidelines also require that the subject property is graded so that in the event of major rainstorms.
- The water will drain away from the perimeter walls of the property
- The water does not create a puddle where it can seep into the foundation
Proper Workmanship And No Foundation Damage
HUD guidelines also require that the subject property be clear of defective workmanship.
- No foundation damage as well as structural damage caused by termites, water, or deferred maintenance
- FHA appraisal guidelines mandates that the roof have at least a 3-year life span left
- The roof cannot have any missing shingles or tiles or have any sign of leakage
Separate Living Quarters And Full Kitchen
HUD guidelines also require that the subject property has ample living space.
- The property requires separate living quarters, a full kitchen. and family entertainment area
- The home needs to have properly working bathrooms with all electrical, plumbing, and HVAC in good operating order
Proper Sanitary Facilities And HVAC
FHA appraisal guidelines also require that the subject property have the following:
- Sanitary facilities which include functional sewage systems
- Proper heating and ventilation
- Temper controlled heating system
- Hot water
- Properly working electrical and plumbing and safe drinking water.
All water, electric, gas, and sewer systems must be independent for the subject property with not depending on another property.
Free Of Moisture And Mold
FHA appraisal guidelines require that all basements, attics, and crawl spaces must be free of moisture and dampness and have proper natural ventilation.
- This is in order to minimize heat and moisture that will eventually be the cause of decay, deterioration, and structural damage
- All crawl spaces need to be easily accessible and clear of debris
These are just a few of FHA appraisal guidelines and in a way, it is a good thing.
- Conventional appraisal guidelines are similar to FHA appraisal guidelines
- There is no lender that will approve a mortgage loan in the event if the appraisal report comes back with defective items on the property
Transferring From One FHA Lender To Another FHA Lender
FHA Appraisals can transfer from one lender to another lender.
- In general, a home buyer cannot change a conventional loan appraisal to an FHA appraisal but if a conventional loan goes from a Conventional to FHA, it can easily be converted
FHA appraisals transfer when a Borrower transfers lenders from one lender to another FHA Lender with the transfer of the FHA Case Number transfer.