A reader asks,
“Are FHA appraisals generally more “strict” than traditional mortgage appraisals? I am questioning what types of repairs are generally required in advance of closing?”
“Specifically, I am selling my owner-occupied home to buyers that are anticipating an FHA loan, but they have expressed concern about the appraisal process.”
“There are cosmetic concerns at the house (rooms need paint, screen door should be replaced, missing shutter), but the well, septic, roof and furnace are all relatively new. Can you please clarify?”
This question is difficult to answer for one simple reason–FHA appraisals require the home to live up to both FHA minimum property standards (MPRs) AND state/local building code. If FHA minimum standards are met, but local code compliance is not evident, FHA MPRs do NOT trump the local code.
In other words, a home can meet FHA minimum standards and still be out of compliance with a local ordinance. FHA rules supplement the local code, not replace it.
Borrowers who have concerns about the condition of a home should not rely on the appraisal as a stamp of approval. A home inspection is not a mandatory part of the FHA loan process, but borrowers should pretend like it is.
If you are selling a home and are concerned about whether it will pass the appraisal process, it’s a good idea to confer with an experienced home inspector or real estate agent about local issues that could affect the sale of your home.
Yes, it does cost money to hire a home inspector to help with these issues–but for those who have made selling the home a priority, it may be a wise investment to make.
Do you have questions about the FHA home loan process? Ask us in the comments section.