Structural concerns like foundation cracks or a leaky roof will also stand out. If you know about these issues, it’s worth resolving them ahead of time to prevent delays or complications down the line.
How Can You Make Sure Your FHA Appraisal Goes Smoothly?
Our role is to ensure your home meets FHA standards for safety, stability, and security. There are simple steps you can take beforehand to avoid unexpected setbacks.
Start by addressing the obvious issues. Fix things like chipped paint, cracked windows or ceilings, or exposed wires or outlets that don’t work—common safety concerns that can delay your progress if flagged during the appraisal.
Next, focus on the essentials. Check that all doors and windows open, close, and lock as they should. For staircases or steps, install handrails if they’re missing. Secure any loose or rickety areas around old stairs and make sure there is nothing that could be considered a trip hazard. Don’t overlook utilities, either; make sure everything from the furnace to the water heater is in proper working order before the appraiser arrives.
When Do You Actually Need an FHA Appraisal?
If you’re applying for an FHA loan, you’ll need an FHA appraisal. It’s an important step where we confirm your home’s value and make sure it meets FHA’s safety and quality standards.
Here’s when you’ll need an appraisal:
- Renovation loans: If you’re using an FHA 203(k) loan, we’ll appraise the property to confirm its value before and after your planned renovations.
- Reverse mortgages: For Home Equity Conversion Mortgages (HECM) designed for seniors, we assess the home to make sure it qualifies for the loan.
- Energy-efficient mortgages: These loans require an appraisal to verify the home’s value and the potential benefits of any energy-saving improvements.
- Most refinance loans: If you’re refinancing with a rate-and-term or cash-out option, we’ll need to complete an appraisal as part of the process.
- Purchase loans: FHA 203(b) loans, which are the most common type of FHA mortgage, require us to check the home’s value and compliance with FHA standards.
Not all FHA loans require an appraisal, though. If you’re applying for an FHA streamline refinance, we can skip this step since these loans are designed to simplify the process. Similarly, FHA Title 1 loans, used for smaller home improvement projects, don’t require an appraisal either.
Who Covers the Cost of an FHA Appraisal?
As the buyer, covering the FHA appraisal cost falls on your shoulders. While technically part of the closing expenses, this fee is usually paid upfront when the appraisal is scheduled.
What’s the FHA Appraisal Process Like?
Once you’ve placed an offer on a home, the FHA appraisal process begins, initiated by your lender. Here’s how it unfolds step by step:
Scheduling the Appraisal
After your lender approves, we, as FHA-certified appraisers, take charge of scheduling the appraisal.
Conducting a Thorough Inspection
During the visit, we meticulously examine the property.
Analyzing Comparable Properties
To establish the home’s market value, we review comparable properties—or “comps”—that recently sold in the same area.
Compiling the Report
After the inspection, we generate a comprehensive report. This document outlines the property’s market value and identifies any required repairs to meet FHA’s stringent standards for safety, soundness, and security.
Delivering the Results
Typically, within a week, you’ll receive the completed report. If any repairs are flagged, you’ll have a clear roadmap for addressing them before proceeding with your FHA loan.
Key FHA Appraisal Requirements You Should Know
When we conduct an FHA appraisal, our goal is to ensure the property meets the Federal Housing Administration’s (FHA) strict guidelines. Here’s what we look for during an inspection:
Property Environment and Surroundings
- We check for hazards like strong odors, loud noises, or nearby industrial sites that could affect your quality of life.
- Proper drainage is key, so we make sure water moves away from the foundation and that gutters and downspouts are in working order. This avoids pooling of water that can create long term damage, or worse, lead to flooding.
- Encroachments, like a neighbor’s fence or garage crossing into the property, are noted. While not always an issue, they’re important to flag.
Structure, Walls, and Openings
- The home’s foundation must be stable and free of cracks or damage that could signal structural problems.
- Basements must be dry, with no signs of water damage or leaks.
- We check for active pest infestations, like termites, to ensure the property is free of these concerns.
- Windows, doors, and steps should be fully functional—no broken glass, damaged frames, or missing steps.
- We look for any stairways that require handrails, and peeling or chipping paint must be addressed, especially in older homes with potential lead-based paint risks.
Systems, Utilities, and Fixtures
- All utilities, including water, heat, sewage, and electricity, need to be operational during the appraisal.
- Heating systems must work properly, and if air conditioning is installed, it should function as well.
- Plumbing should be in good shape, with adequate water pressure and hot and cold water readily available.
- Electrical outlets and switches must work correctly, with no exposed wiring or safety issues.
Roofing and Upper Spaces
- The roof should be free of leaks and have a minimum of two years of useful life remaining.
- Crawl spaces and attics need proper ventilation and should be free of mold, pests, or other damage.
What Happens After the FHA Appraisal?
Once we finalize your FHA appraisal, you’ll receive a comprehensive report outlining the property’s market value and any necessary repairs. If the report flags repairs, these must be addressed before your loan can proceed.
The appraisal remains valid for 180 days, but most FHA loans close significantly faster—often within one to two months. Should you have any concerns or need assistance resolving issues identified during the appraisal, we’re here to support you every step of the way.
