How Long Does an FHA Appraisal Take?

Securing a home loan involves several steps. For those pursuing a Federal Housing Administration (FHA) loan, the appraisal process is a key requirement. This evaluation ensures the property meets specific requirements, and understanding its timeline can help prospective homeowners navigate their purchase with confidence. This article clarifies the typical timeline and factors influencing this crucial step.

Understanding the FHA Appraisal

An FHA appraisal is an assessment conducted by an FHA-approved, licensed appraiser. Its objective is twofold: to determine the property’s fair market value and to ensure it meets the U.S. Department of Housing and Urban Development’s (HUD) Minimum Property Standards (MPS). The market value assessment protects the lender from over-lending and the buyer from overpaying, ensuring the loan amount does not exceed the home’s worth.

The second purpose of an FHA appraisal is to verify the property’s habitability, safety, and structural soundness according to HUD guidelines. These standards cover major systems like heating, electrical, and plumbing, as well as the roof’s condition and accessibility. The appraiser looks for health and safety hazards, including exposed wiring, damaged foundations, or peeling lead-based paint in older homes. If a property fails to meet these requirements, it may not qualify for FHA financing until necessary repairs are made.

Typical Appraisal Timeline

The FHA appraisal process begins once a buyer and seller sign a purchase agreement and the mortgage lender orders the appraisal. The on-site inspection by the appraiser can range from one to several hours, depending on the property’s size and condition. Following the site visit, the appraiser compiles findings, conducts market research using comparable sales, and prepares a report.

The appraisal report is completed and submitted to the lender within 7 to 10 business days from the date of inspection. This timeframe includes the appraiser’s visit, subsequent analysis, and submission of the report to the lending institution.

Elements Affecting Appraisal Duration

Several factors influence the duration of an FHA appraisal, extending or shortening the timeline. A factor is the appraiser’s availability and workload, which varies based on market demand and the number of appraisals in progress. High-demand housing markets may experience appraisal backlogs, delaying report completion.

The complexity of the property plays a role in how long the appraisal takes. Properties with unique features, large sizes, or those in rural areas with scarce comparable sales data may require more research and analysis. Ease of access to the property and provision of information to the appraiser can streamline the process. Delays in communication or documentation submission from any party can complicate and extend the timeline. If the appraiser identifies issues necessitating specialized inspections, such as for wells, septic systems, or pest infestations, this can add days or weeks to the process.

What Happens After the Appraisal

Once the FHA appraisal report is submitted, the mortgage lender reviews it. This review ensures the appraised value aligns with the loan amount and confirms the property meets FHA minimum property standards. If the appraisal identifies no issues, the loan application proceeds to the underwriting phase for approval.

If the appraisal uncovers property deficiencies or repairs to meet FHA standards, these are noted as “conditions” that must be addressed. Common issues include peeling paint, damaged major systems, or structural concerns. The FHA allows up to 120 days for repairs to be completed to bring the property into compliance. After repairs, a re-inspection by the original appraiser is required to verify conditions have been met. Only after re-inspection and approval by the lender can the loan move towards closing, as FHA appraisals are valid for 120 to 180 days.