What Do FHA Appraisers Look For in a Home?
Learn what FHA appraisers examine to ensure your home meets safety, structural, and health standards for FHA loan eligibility.
An appraisal for a Federal Housing Administration (FHA) loan serves a specific purpose. It is crucial for borrowers seeking FHA financing, protecting them by ensuring the home meets minimum standards. The appraisal confirms the property is safe, structurally sound, and sanitary, distinguishing it from a conventional appraisal focused solely on market valuation. This process safeguards the investment for both the homeowner and the FHA.
Minimum Property Requirements
The Federal Housing Administration establishes Minimum Property Requirements (MPRs) that homes must satisfy for FHA financing. These criteria ensure the property provides a secure and habitable living environment. MPRs focus on three core pillars: promoting occupant health, ensuring safety, and confirming structural soundness.
Regarding health, the appraiser assesses the property to ensure it does not pose environmental hazards or lack basic sanitation. This includes evaluating the presence of adequate potable water and a functional sewage disposal system. Safety considerations involve examining conditions that could lead to injury, such as safe access to and from the property, and the presence of proper egress from living spaces. Structural soundness focuses on the fundamental integrity of the building.
This involves inspecting the foundation, framing, and roof to ensure they are stable and free from significant defects. These requirements protect the FHA insurance fund and the homeowner by preventing the financing of properties that are uninhabitable or require immediate, substantial repairs. These principles guide the appraiser’s examination of property components.
Key Property Aspects Evaluated
FHA appraisers examine various property aspects to ensure compliance with Minimum Property Requirements. The exterior receives a thorough inspection, starting with the roof’s condition to identify missing shingles, active leaks, or signs of significant wear. The foundation is checked for major cracks, shifting, or other indicators of structural instability. Proper drainage is assessed to ensure water flows away from the house, preventing moisture intrusion and foundation issues.
Siding, trim, and exterior paint are reviewed for general condition, with particular attention to peeling or chipping paint on homes built before 1978 due to lead-based paint concerns. This focus aims to mitigate health risks to future occupants. The structural integrity of the exterior, including porches, decks, and attached garages, is evaluated for soundness and safety.
Inside the property, the appraiser verifies the functionality of essential utilities. This includes confirming plumbing systems deliver adequate water pressure and are free from leaks, electrical systems are operational and safe, and heating and cooling systems provide comfortable living conditions. Interior structural integrity is assessed by looking for significant cracks in walls, ceilings, or floors, which could indicate underlying structural problems. Adequate living space and safe access to all rooms are considered, along with handrails on staircases. The general condition of the interior, such as working doors and windows, and absence of missing fixtures, contributes to the overall habitability assessment.
Safety hazards are a primary concern for FHA appraisers, who identify and report conditions such as exposed electrical wiring, which poses an immediate shock risk. Missing handrails on stairs or at elevated areas are flagged as fall hazards. Evidence of active water leaks or visible mold growth is noted due to health and structural implications. Appraisers look for signs of pest infestations, particularly termites, which can compromise structural integrity. Any apparent hazardous materials, such as asbestos, are considered if they present an immediate health risk.
The site and surrounding neighborhood are reviewed for certain conditions. Appraisers consider factors like proximity to hazardous land uses, such as high-voltage power lines or industrial areas that could generate excessive noise or pollution. Proper site drainage is confirmed to prevent water accumulation near the dwelling, safeguarding the property from moisture-related damage.
Addressing Identified Issues
When an FHA appraiser identifies conditions that do not meet the Minimum Property Requirements, these are categorized as “required repairs.” The appraisal report will explicitly detail these deficiencies, informing all parties involved. The lender will then mandate that these issues be resolved before the FHA loan can be finalized.
A re-inspection of the property is necessary after the repairs are completed. This re-inspection verifies that all identified deficiencies have been addressed according to FHA standards, ensuring the property now meets the necessary safety, health, and structural requirements. Without confirmation of satisfactory repairs, the FHA loan cannot proceed.
The responsibility for paying for these required repairs is generally determined through negotiation between the buyer and the seller. This agreement is typically outlined in the purchase contract. Buyers and sellers should clarify who will cover these costs early to avoid delays. The resolution of these identified issues is a mandatory step to secure FHA financing.