With the rapid increase in the use of FHA mortgages, many real estate professionals and homeowners are unaware of the FHA appraisal guidelines. This is not intended to be a complete list, however it does cover some of the most common appraisal inspection issues. Correcting or addressing these issues prior to the appraisal inspection will cut down on the costs associated with re-inspections.
- If the home was built prior to 1978, any peeling, chipping, or cracked paint on the exterior or interior will have to be corrected. These areas will have to have all loose paint scraped, primed and painted prior to the inspection. Areas to check are all windows, sun exposed areas, garage, and doors.
- The home must have a good representation of operation fire detectors.
- The electrical system must meet the homes needs. If the current electrical supply appears to be inadequate for the home, the appraiser may require a qualified electrician to determine the proper capacity required. The appraiser is required to test a representative of electrical switches and lights.
- The appraiser is required, at a minimum, to make a head and shoulders inspection of the attic area. Therefore the appraiser will have to gain access to this area. If the scuttle door is painted shut, or the home is newer construction the seal will have to be broken. A clear path should also be provided to this area.
- The heating and cooling system will have to be tested. Any programmable thermostat should be set to manual.
- If the home is vacant, or it’s an REO property, all utilities will have to be turned on and be in working order (water, electrical, and gas).
- Garage door opener(s) will have to be tested for functionality and reverse mode. It’s important to note that if the reverse function is not working properly severe damage to the garage door can occur when testing.
- Properties with well and septic should have a site map of their location made available. They should also be clearly marked with a stake (drain field, septic tank, and well), or some other marker when possible.
- If any area around the home has negative drainage (sloping towards the house), this area will have to be corrected.
- A home that has a private well and septic, and public utilities are available, they may be required to hook-up to such utilities. There are special hardship guidelines, contact the lender for details.
- If personal property (appliances) are part of the sale, the lender may want to know if appliances are in working order.
- Items that are considered deferred maintenance typically aren’t required to be fixed, unless they are deemed to be a safety issue. Safety issues could be large cracks or settling of walkways, loose windows or doors, trees to close to the roof or power lines, faulty steps, major settling of the foundation, etc..
- The appraiser will need a clear path to all crawlspaces for inspection. FHA guidelines require a minimum of 18” in the crawl space; however lenders have been known to waive this.
If there is an item that you don’t see on this list please feel free to contact me. I’ll be glad to answer any questions you have.