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FHA Appraisal Standards: What You Need To Know

June 24, 2019

FHA Appraisal Standards: What You Need To Know

A recent press release by HUD applauds new lead paint hazard requirements issued by the Environmental Protection Agency. Those standards include a more strict requirement for lead levels in certain homes and “child-occupied facilities”.

According to a press release on the HUD official site, “Since the 1970s, the United States has made tremendous progress in lowering children’s blood lead levels. In 2001, EPA set standards for lead in dust for floors and windowsills in housing, however since that time, the best available science has evolved to indicate human health effects at lower blood lead levels than previously analyzed.”

The new rules don’t necessarily affect FHA appraisal guidelines with specific changes-FHA loan rules address lead paint issues, generally requiring abatement of lead-based paint in homes older than 1978 where there is peeling paint or related problems.

But it does lead some to ask about FHA appraisal rules in general since there are the FHA appraisal guidelines which must be followed, but also state and local building code, non-FHA federal guidelines, and other rules.

Some will ask a question about a specific aspect of the appraisal process; “My realtor says the home with a dug well might not pass the FHA appraisal process. Is this true?”

Or, “My real estate agent says that the high-voltage power lines that run across the property might make it ineligible for an FHA mortgage. Is this true?”

The answer isn’t ever as simple as yes or no and that’s because with appraisals, FHA minimum requirements must be met, but those requirements do not address every single possible situation that could make a home eligible or ineligible for a loan.

However, state and local code may be far more comprehensive-and those rules definitely apply to any home to be purchased with an FHA mortgage.

The bottom line is-if you are not sure about a certain aspect of feature of a home and whether it will “pass” the appraisal process, you will need to consult the local authority for building code as well as the FHA appraisal requirements.

To protect children’s health and to continue making progress on this important issue, EPA is lowering the dust-lead hazard standards from 40 micrograms of lead per square foot (µg/ft2 ) to 10 µg/ft2 on floors and from 250 µg/ft2 to 100 µg/ft2 on windowsills. The revised, more protective standards lower the level of lead in dust that may warrant measures to reduce risks. The expectation is that the update will become effective near the end of this year.

Bruce Reichstein - FHA News Author

By Bruce Reichstein

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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