March 11, 2019
Some wonder if they have had a home inspection when the FHA appraisal results come back. First-time home buyers should know that a home inspection is something that should be done regardless of the appraisal because the two procedures are quite different.
The appraisal is not a tool for the borrower and will not give you an idea of the true condition of the home. The home inspection is the job that needs to be done to give you that information.
The FHA itself publishes a pamphlet called “For Your Protection, Get A Home Inspection” which includes this advice;
“You have the right to examine carefully your potential new home with a professional home inspector. But a home inspection is not required by law, and will occur only if you ask for one and make the arrangements.”
You read that correctly. A borrower who needs to ask if they have had a home inspection has NOT HAD ONE. The purchaser must arrange and pay for the home inspection, which can be scheduled before or after the contract is signed.
It’s best to get one prior to singing the contract and/or have a clause added to the sales contract that the deal is contingent on the results of the inspection.
Remember, the appraisal is not an inspection. The FHA itself advises borrowers, “An appraisal estimates the market value of the home to protect the lender.
An appraisal does not examine or evaluate the condition of the home to protect the home buyer.” The appraisal process is designed only to make sure the home meets MINIMUM standards.
As stated above, if you do not arrange and pay for a home inspection, you have not had one. And those who choose to buy a home without the inspection on the strength of the appraisal alone do so at their own risk with no assistance possible from the FHA in the event that the property winds up having problems that were undetected before purchase.
From the FHA official site:
“If you find problems with your new home after closing, neither FHA nor your lender may give or lend you money for repairs. Additionally, neither FHA nor your lender may buy the home back from you. Ask a qualified home inspector to inspect your potential new home and give you the information you need to make a wise decision.”
Ask your lender about these issues if you don’t understand how they can affect your home loan.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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