Monday, February 14, 2011

FHA Appraisals

Last week I took a course in the process from contract to closing on homes. It was taught by an attorney, Rob Carter ( who gave it a different perspective. I wanted to share one of his handouts....

This is entitled "Most Common FHA Repairs." I will paraphrase in some places, but for the most part it will be the sheet we received. It comes from Forsythe Appraisals' website:(

An FHA appraisal seeks to determine if the house is able to be mortgaged by the Federal Housing Authority. As agents, we sometimes dread theses appraisals in older homes because they are super-critical it seems, at times. Reading this list, any mortgage appraiser would be looking at the same things, I think. The suggestion from Forsythe is that by using this list you will be forewarned, and therefore can make the repairs prior to even marketing the house, much less getting as far as an appraisal.

  • If the home was built prior to 1978, chipping peeling paint must be scraped and painted.
  • The roof should have 2-3 years of useful life and no more than 2 layers of shingles.
  • The cause of wet basements should be cured.
  • Abandoned inoperable wells must be capped and sealed.
  • Infestation of any kind should be exterminated.
  • Damaged or inoperable plumbing, electric and heating systems should be repaired.
  • Structural or foundation problems must be repaired.
  • Flammable storage tanks must be removed and the filler cap sealed from the inside (e.g. buried oil tank).
  • If there is a crawl space or attic, it will be the homeowner's responsibility to make this area accessible so that it can be thoroughly inspected.

A lot to do here - and I would wager that for many older homes some of these items are not completed and the appraisal still goes through. The one thing - besides the lead paint issue - that FHA appraisals are known for are railings on steps as safety issues, but it wasn't included here. Food for thought!