New FHA Appraisal Guidelines

The guidelines are changing for FHA appraisals.  After speaking with an appraiser last week, he said he is now expected to do much more in terms of inspecting the property….so much so that he’s going to put doing FHA appraisals on hold until he can figure out exactly what is required.  As a seller, if you have a buyer who is obtaining FHA financing, you’ll want to make sure you know what the FHA appraiser is looking for.  For example, one of the requirements is that the appraiser must be able to see the four corners of the attic.  If the attic is obstructed by objects, he will have to come back for a re-inspect and someone will incur an additional charge for that.  The primary purpose of the inspection by the appraiser is to look for issues as they relate to health and safety.  If he notes something on the appraisal, it will need to be addressed before the loan can close.

So what’s the advantage of using FHA financing?  The requirements to qualify are usually less stringent than a conventional loan and the downpayment is lower – only 3.5%.  However, FHA mortgage premium costs have continued to increase over the last several years, making it less appealing to some.

Detailed information can be found in the FHA Handbook.

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