FHA Appraisal Re-Inspection

FHA Appraisal Re-Inspection

An FHA appraisal re-inspection is required when 180 days have passed since the first inspection and the FHA loan has not closed yet.

Furthermore, an FHA reinspection is required when there are issues discovered that won´t pass an FHA inspection, such as the violation of the peeling paint guidelines.

Read our analysis and complete study of the FHA loan requirements.

A re-inspection is when the appraiser is required to return to the property to verify that certain repairs or improvements have been made. This is typically required if the initial appraisal identified deficiencies or issues that need to be addressed before the loan can be approved. The purpose of the re-inspection is to ensure that the repairs have been completed and that the property meets the FHA’s minimum property standards.

The appraiser acts as the eyes of the lender and the eyes of HUD. If the appraiser notes any of the issues that won’t pass FHA inspection, the appraisal is then completed subject to repairs or re-inspection. 

Once those repairs are complete, the appraiser is called back out to verify that the home now meets the guidelines. While the underwriter can overrule the re-inspection, the client will want to ensure that the required repairs are performed, so will arrange a reinspection in any case.

The appraiser has to perform the reinspection and cannot verify repairs were completed simply by someone else photos. If the client hired the appraiser to go back to the property after the necessary repairs were allegedly performed, he has to go. An appraiser will not sign something that was not seen in person.

That is the reason why in the real estate industry we usually think that the appraiser is behaving weirdly about the reinspection, but he simply has instructions from the client and also, represents the interests of the FHA in that reinspection.

FHA appraisals are good for up to 180 days. In some instances, an appraiser can recertify the value if they agree to do so before the original appraisal expires.

For these typical issues with reinspections, “subject to repair” clauses and to avoid extra costs, we recommend always getting familiar with the FHA appraisal and inspection guidelines and repairing the property beforehand because sometimes you have a property that requires an FHA appraisal re-inspection just because there is peeling paint in an old house that can cost twenty bucks to retrieve and repaint that small segment.

The FHA Appraisal Re-Inspection Process

If you are a homeowner or a buyer using an FHA loan, you may be subject to an appraisal re-inspection. The FHA requires a re-inspection in certain circumstances to ensure that the property meets its requirements. Here is what you need to know about the FHA appraisal re-inspection process.

Pre-Re-Inspection

Before the re-inspection, the appraiser will review the original appraisal report to identify any items that need to be re-inspected. The appraiser will also review any repair receipts or other documentation provided by the homeowner or seller to verify that the repairs were completed satisfactorily.

During Re-Inspection

During the re-inspection, the appraiser will focus on the items that were identified in the pre-re-inspection review. The appraiser will inspect the property to ensure that any required repairs were completed and that the property meets the FHA’s minimum property requirements. The appraiser will also take new photos of the property to document any changes since the original appraisal.

Post Re-Inspection

After the re-inspection, the appraiser will prepare a new appraisal report that includes any changes or updates to the original report. The appraiser will also include a statement that the property meets the FHA’s minimum property requirements. The lender will use this updated appraisal report to determine if the property is eligible for an FHA loan.

It is important to note that the FHA appraisal re-inspection process is not the same as a home inspection. The appraiser is only looking for items that affect the property’s value and safety. If you are buying a home, you should still consider getting a separate home inspection to identify any other issues that may need to be addressed.

In conclusion, the FHA appraisal re-inspection process is a necessary step to ensure that the property meets the FHA’s minimum property requirements. If you are subject to a re-inspection, make sure to provide all necessary documentation to the appraiser and address any required repairs before the re-inspection.

Key Factors in FHA Appraisal Re-Inspection

If you are going through an FHA appraisal re-inspection, there are a few key factors that you should be aware of. In this section, we will discuss the three main areas of focus during an FHA appraisal re-inspection: Property Condition, Safety Measures, and Property Value.

Property Condition

During an FHA appraisal re-inspection, the condition of the property will be evaluated to ensure that it meets the minimum property requirements set forth by the FHA. This includes a thorough inspection of the interior and exterior of the property, as well as any outbuildings or structures on the property.

Some of the key factors that will be evaluated during the property condition inspection include the condition of the roof, foundation, and HVAC systems. Additionally, the appraiser will look for any signs of water damage, mold, or pests, as well as any other issues that could affect the habitability of the property.

Safety Measures

Another important area of focus during an FHA appraisal re-inspection is safety. The appraiser will be looking for any potential safety hazards that could pose a risk to the occupants of the property.

Some of the safety measures that will be evaluated during the re-inspection include the presence of smoke detectors, carbon monoxide detectors, and fire extinguishers. The appraiser will also look for any potential trip hazards, such as loose carpeting or uneven flooring.

Property Value

Finally, the appraiser will evaluate the value of the property during the FHA appraisal re-inspection. This includes a thorough analysis of comparable properties in the area, as well as an evaluation of any improvements or upgrades that have been made to the property since the initial appraisal.

It is important to note that the appraiser will not be looking for cosmetic issues during the re-inspection. Instead, they will be focused on evaluating the overall condition and safety of the property, as well as its value in the current market.

In conclusion, if you are going through an FHA appraisal re-inspection, it is important to be aware of the key factors that will be evaluated. By understanding the areas of focus, you can ensure that your property is in compliance with FHA guidelines and that you are prepared for the re-inspection process.

Common Reasons for FHA Appraisal Re-Inspection

If you’re getting an FHA loan, you should know that the appraisal process is a crucial part of the loan process. The FHA requires that the property meets certain standards before they will approve the loan. If the appraiser finds issues that fall outside of the FHA’s minimum standards, the property will need to be re-inspected to ensure that the issues have been corrected.

Here are some common reasons why an FHA appraisal might require a re-inspection:

• Health and safety issues: The FHA has strict health and safety standards that the property must meet. If the appraiser finds issues like peeling paint, loose handrails, or other safety hazards, those issues must be corrected before the loan will be funded. In other words, the transaction will be put on “hold” until the discrepancies are resolved. Once the issues are fixed, the appraiser will return to the property to make sure that the problems have been corrected.
• Property condition issues: The appraiser will also look at the overall condition of the property. If there are issues with the roof, foundation, or other major components of the property, the appraiser may require a re-inspection to make sure that the issues have been fixed.
• Missing permits or unpermitted work: If the appraiser finds that there is work that has been done on the property without the proper permits, they may require a re-inspection to ensure that the work has been done to code.
• Crawl space and attic issues: The FHA requires that the appraiser inspect the crawl space and attic. If the appraiser is unable to observe the entire area, they may require a re-inspection to make sure that the area has been fully inspected.

In conclusion, the FHA appraisal process is an essential part of the loan process. If the appraiser finds issues that fall outside of the FHA’s minimum standards, the property will need to be re-inspected to ensure that the issues have been corrected. By knowing the common reasons why an FHA appraisal might require a re-inspection, you can be better prepared for the appraisal process and avoid unnecessary delays in your loan approval.

How to Prepare for an FHA Appraisal Re-Inspection

If you’re getting an FHA loan, you’ll need to have an appraisal done on the property you want to purchase. If the appraiser finds any issues that need to be addressed, you’ll need to fix them before the loan can be approved. Once the repairs are done, the appraiser will need to come back and do a re-inspection to make sure everything is up to code. Here’s how to prepare for an FHA appraisal re-inspection:

Property Maintenance

Before the appraiser comes back for the re-inspection, you’ll need to make sure the property is in good condition. Here are some things you can do to prepare:

• Check the roof for leaks or damage
• Make sure the plumbing and electrical systems are working properly
• Ensure that the heating and cooling systems are functioning correctly
• Check for any signs of water damage or mold
• Repair any cracks or holes in the walls or foundation
• Make sure all doors and windows are in good condition and open and close properly

Documentation

In addition to making sure the property is in good condition, you’ll need to provide documentation to the appraiser to show that any repairs have been made. Here’s what you’ll need:

• Receipts for any repairs that were done
• A letter from the contractor who did the repairs stating that they were completed correctly
• Before and after photos of any repairs that were made

It’s important to keep in mind that the appraiser will be looking for evidence that any issues have been addressed and that the property is now in good condition. Providing the necessary documentation can help ensure that the re-inspection goes smoothly and that your loan is approved.

In conclusion, preparing for an FHA appraisal re-inspection involves ensuring that the property is in good condition and providing the necessary documentation to the appraiser. By following these steps, you can help ensure that your loan is approved and that you can move forward with your home purchase.

Potential Outcomes of FHA Appraisal Re-Inspection

If your property fails the initial FHA appraisal inspection, you may be required to make necessary repairs before the loan can be approved. In some cases, the lender may order a re-inspection of the property to ensure that all necessary repairs have been made.

Here are some potential outcomes of an FHA appraisal re-inspection:

• Passing the re-inspection: If the property passes the re-inspection, the loan process can continue as normal. You will have successfully addressed all necessary repairs, and the lender can move forward with the loan approval process.
• Failing the re-inspection: If the property fails the re-inspection, you will be required to make additional repairs to bring the property up to FHA standards. You may need to order another re-inspection to ensure that all repairs have been made before the loan can be approved.
• Reduced loan amount: In some cases, the lender may approve the loan but reduce the loan amount to reflect the cost of necessary repairs. This means that you will need to come up with the additional funds to cover the cost of repairs before the loan can be approved.
• Loan denial: If the property fails the re-inspection and you are unable or unwilling to make the necessary repairs, the lender may deny your loan application. This means that you will need to either find another lender or make the necessary repairs before reapplying for the loan.

It’s important to note that the outcome of an FHA appraisal re-inspection will depend on the severity of the issues found during the initial inspection and the quality of repairs made. If you are unsure about the repairs required or the outcome of a re-inspection, it’s best to work closely with your lender and a qualified FHA appraiser to ensure that all necessary repairs are made and the loan can be approved.

FHA Appraisal Subject to Repairs

If the FHA appraiser determines that the property is subject to repairs, the appraiser will note those repairs on the appraisal report. The lender must ensure that all repairs are completed before the loan is funded. The FHA appraisal subject to repairs is a common situation, and it is important to understand how it works.

The repairs required by the FHA appraiser may fall into two categories: cosmetic repairs and repairs that are necessary to meet the minimum property requirements (MPRs). Cosmetic repairs are those that are not required to meet the MPRs, but that the appraiser has identified as necessary to improve the overall condition of the property. MPR repairs are those that are required to meet the minimum standards set by the FHA.

If the repairs required by the FHA appraiser fall into the MPR repairs category, you must complete those repairs before the loan is funded. The appraiser will note those repairs on the appraisal report, and the lender will require that you complete those repairs before the loan is funded. The lender may require that the repairs be completed by a licensed contractor, and they may require that the repairs be inspected by the appraiser before the loan is funded.

However, there are some red flags that an FHA appraiser may note that could indicate more serious issues with the property. These red flags may include:

• Roof damage: If the appraiser notes that the roof is damaged or leaking, this could indicate a more serious problem with the property’s structure.
• Electrical issues: If the appraiser notes that the electrical system is outdated or not up to code, this could pose a safety hazard to the occupants of the property.
• Plumbing issues: If the appraiser notes that the plumbing system is outdated or not functioning properly, this could lead to water damage or other issues.

If any of these red flags are noted on the FHA appraisal, the lender may require that additional inspections be completed to ensure that the property is safe and livable.

FHA Appraisal Guidelines

When it comes to FHA appraisals, there are certain guidelines that must be followed to ensure that the property is safe and meets minimum property requirements. These guidelines are in place to protect both the borrower and the lender. Here are some key points to keep in mind:

Property Eligibility

First and foremost, the property must be eligible for FHA financing. This means that it must be a residential property with one to four units, and it must be the borrower’s primary residence. Additionally, the property must be located in the United States, and it must meet minimum property requirements.

Appraisal Process

The appraisal process is an important part of obtaining an FHA loan. The appraiser must be FHA-approved and must follow specific guidelines when conducting the appraisal. The appraiser must also use the appropriate appraisal form for reporting an FHA appraisal, which can be either the Uniform Residential Appraisal Report or the Manufactured Home Appraisal Report.

Minimum Property Requirements

The property must meet certain minimum property requirements in order to be eligible for FHA financing. These requirements include:

• The property must be safe, sound, and secure
• The property must be free of any hazards that could affect the health or safety of the occupants
• The property must have adequate heating, cooling, and ventilation systems
• The property must have a roof that is in good condition
• The property must have functioning electrical and plumbing systems
• The property must have a working kitchen and bathroom
• The property must have adequate living space

Re-Inspection

If the appraiser identifies any issues that do not meet the minimum property requirements, the lender may require a re-inspection to ensure that the issues have been resolved. The re-inspection must be conducted by the original appraiser or another FHA-approved appraiser.

In conclusion, following FHA appraisal guidelines is essential to obtaining an FHA loan. By ensuring that the property meets minimum property requirements, both the borrower and the lender can be confident that the property is safe, sound, and secure.

How Long Does an FHA Appraisal Stay with a Property?

When you are buying a property with an FHA loan, you will need to have an appraisal done on the property. An FHA appraisal is an inspection that determines the value of the property and ensures that it meets certain safety and livability standards. But how long does an FHA appraisal stay with a property?

The answer is that it depends on the type of appraisal. According to HUD, for most Title II forward and Home Equity Conversion Mortgage (HECM) originations, the initial appraisal validity period has been extended from 120 days to 180 days. This means that the appraisal is valid for 180 days from the date it was completed.

In addition, the appraisal update validity period has been extended from 240 days to one year. This means that if the appraisal is updated within one year of the original appraisal date, the updated appraisal is still valid.

It’s important to note that the appraisal validity period can be affected by certain factors. For example, if there are significant changes to the property or the market conditions, the appraisal may need to be updated. In addition, if the loan doesn’t close within the validity period, a new appraisal may be required.

It’s also important to keep in mind that an FHA appraisal is specific to the property being appraised. If you are buying a different property, you will need to have a new appraisal done for that property.

In summary, an FHA appraisal is valid for 180 days from the date it was completed, and the updated appraisal is valid for one year. However, certain factors can affect the appraisal validity period, and a new appraisal may be required if the loan doesn’t close within the validity period.

FHA Appraisal Handbook

If you are a homeowner or a potential buyer of a property that is financed through the Federal Housing Administration (FHA), you need to be aware of the FHA appraisal handbook. This handbook is a comprehensive guide that outlines the minimum property standards that must be met for a property to be eligible for FHA financing. The handbook is also used by FHA appraisers to determine the value of a property and to identify any deficiencies that must be corrected before the loan can be approved.

The FHA appraisal handbook covers a wide range of topics, including property eligibility, appraisal requirements, and property condition. The handbook provides detailed guidance on how to conduct an appraisal, including the use of appropriate appraisal forms, the selection of comparable properties, and the determination of the property’s fair market value.

One of the key requirements of the FHA appraisal handbook is that the property must meet certain minimum property standards. These standards are designed to ensure that the property is safe, sound, and structurally secure. The standards cover a wide range of areas, including the roof, the foundation, the electrical and plumbing systems, and the heating and cooling systems.

In addition to the minimum property standards, the FHA appraisal handbook also includes guidelines for re-inspection of properties that have been repaired or renovated. If a property fails to meet the minimum property standards, the appraiser will identify the deficiencies and provide a list of required repairs. Once the repairs have been completed, the appraiser will conduct a re-inspection to ensure that the repairs have been made and that the property now meets the minimum property standards.

Overall, the FHA appraisal handbook is an essential resource for anyone involved in the FHA loan process. Whether you are a homeowner, a homebuyer, or a real estate professional, it is important to understand the requirements and guidelines outlined in the handbook to ensure that your property is eligible for FHA financing.

FHA Appraisal Checklist for Underwriters

As an underwriter, it’s important to have a clear understanding of the FHA appraisal checklist to ensure that the property meets the minimum requirements for FHA financing. Here are some of the key items that you should look for when reviewing an FHA appraisal report:

General Information

• Verify that the property address on the appraisal report matches the address on the sales contract and FHA case number assignment.
• Check that the appraisal report is completed by a HUD-approved appraiser and that the appraiser has provided their license number.
• Ensure that the appraisal report is completed on the appropriate FHA appraisal form (e.g., FHA Case Number Assignment & Appraisal Report Form 1004).

Property Condition

• Verify that the property meets the minimum property requirements (MPRs) for FHA financing. MPRs include items such as adequate heating, functioning plumbing, and electrical systems.
• Check that there are no health and safety hazards, such as exposed wiring or peeling paint in homes built before 1978.
• Ensure that the property is structurally sound and free from any major defects.
• Verify that the roof is in good condition and has a remaining useful life of at least two years.
• Check that the property has adequate access and egress, including stairs, handrails, and exits.

Property Value

• Verify that the appraiser has provided an accurate estimate of the property’s market value.
• Check that the appraiser has provided appropriate comparable sales data to support the value estimate.
• Ensure that the appraisal report includes a clear description of the property’s physical characteristics, including the number of bedrooms and bathrooms, square footage, and lot size.

By reviewing these key items on the FHA appraisal checklist, you can help ensure that the property meets the minimum requirements for FHA financing and that the appraisal report is accurate and complete.

FHA Appraisal vs Conventional Appraisal

If you are in the process of buying a home, you may have heard of FHA appraisals and conventional appraisals. Both types of appraisals serve the same purpose of determining the value of the property you are interested in purchasing, but there are some key differences between them.

FHA Appraisal

An FHA appraisal is typically required if you are applying for an FHA loan, which is a mortgage that is insured by the Federal Housing Administration. One of the main differences between an FHA appraisal and a conventional appraisal is that an FHA appraisal is more thorough. In addition to determining the value of the property, an FHA appraiser will also inspect the property to ensure that it meets the minimum property requirements set forth by the FHA. These requirements include things like:

• The property must be safe, sound, and secure
• The property must have adequate heating, cooling, and ventilation
• The property must have safe and potable water
• The property must have a properly functioning sewage system

If the property does not meet these requirements, the seller may be required to make repairs before the sale can be completed.

Conventional Appraisal

A conventional appraisal is typically required if you are applying for a conventional loan, which is a mortgage that is not insured by the Federal Housing Administration. Unlike an FHA appraisal, a conventional appraisal is primarily focused on determining the value of the property. The appraiser will look at comparable properties in the area to determine the fair market value of the property you are interested in purchasing.

Which Appraisal Should You Choose?

The type of appraisal you choose will depend on a variety of factors, including the type of loan you are applying for and the condition of the property you are interested in purchasing. If you are applying for an FHA loan, you will need to have an FHA appraisal. If you are applying for a conventional loan, you will need to have a conventional appraisal. In some cases, you may be able to choose between the two types of appraisals, but it is important to talk to your lender to determine which type of appraisal is right for you.

Overall, both FHA appraisals and conventional appraisals serve the same purpose of determining the value of the property you are interested in purchasing. However, an FHA appraisal is typically more thorough and includes an inspection of the property to ensure that it meets certain minimum property requirements.