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FHA Appraisal Rules For Foundations: A Reader Question

June 24, 2014

108A reader asks, “We are up for a FHA refinance and the appraiser noted that we have a crack in our foundation. We have never had water in the basement ever and it hasn’t moved since i originally purchased the home. We are waiting to hear back from our lender. What is the likelihood this loan will be denied?”

There are several issues that apply in a situation like this including the severity of the foundation problem. Not knowing that specific information makes it hard to know which way the call might go but it’s impossible to speculate what one financial institution might do. But that’s not the most relevant issue at work here.

State or local building code may address the foundation issue specifically. If the home is not up to code, the appraiser may require certain fixes or corrections as a condition of loan approval.

What’s more, the appraiser may or may not have made such recommendations–the reader question doesn’t mention it–and those recommendations would have to be performed with a possible compliance inspection required to insure the corrections or fixes have been made to the appraiser’s satisfaction.

It’s entirely possible that the foundation issue isn’t a problem, depending on the severity and what state or local building code says about the condition of the foundation. In these cases its best to refer to the appraiser’s report on the property to see what corrections are required.

Do you have questions about FHA home loans? Ask us in the comments section. You can get information about applying or getting pre-approved for an FHA loan at FHA.com, a private company and not a government website.

Joe Wallace - Staff Writer

By Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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