Articles Tagged With: Appraiser

October 5, 2020

Can I Get A Second FHA Appraisal If I Don’t Agree With The First One?

Can I get a second FHA appraisal if I don’t agree with the first one? This is a common question, normally asked if the appraised value of the home comes in differently than a buyer or seller expects it to. FHA loan rules don’t allow a borrower to be forced into purchasing a home where the appraised value is lower than the asking price, so it’s an issue that can definitely affect a home loan transaction depending on what the borrower wishes to do in such cases. Can I Order A Second FHA Appraisal? FHA appraisals are ordered by the lender, so the borrower cannot initiate any second appraisal requests. In any case, the lender is restricted on how and when a second appraisal may be ordered. Specific Restrictions On | more...

September 21, 2020

Time Is Running Out On Exterior-Only FHA Appraisals

By Bruce Reichstein

In August 2020, the FHA and HUD issued an extension of their temporary exterior-only appraisal guidelines for borrowers applying for FHA mortgages and refinance loans. This measure, and others similar to it, came after the President declared a national emergency with respect to the coronavirus pandemic and, according to the FHA/HUD official site, “initiated actions to stem the threat to public health and the American economy.” On March 27, 2020, HUD published Mortgagee Letter 2020-05, authorizing “flexibilities to the re-verification of employment and Acceptable Appraisal Reporting Forms and Protocols by allowing exceptions for Exterior-Only and Desktop Appraisal inspections in certain transactions”. The original measures were issued in March of 2020 to allow FHA appraisers to perform their work on FHA mortgages without having to put themselves at risk of COVID-19 | more...

June 30, 2020

HUD Extends Modified Exterior-Only Appraisals During COVID-19

By Bruce Reichstein

The World Heath Organization says “the worst is yet to come” with regard to the global coronavirus pandemic; the Department of Housing And Urban Development responded to COVID-19 quarantine measures in March 2020, eliminating a requirement temporarily to suspend in-person or indoor appraisal activity. Those changes temporarily meant FHA appraisals would not be subject to a requirement for in-person appraisals that might run in violation of community social distancing policies. The appraisal policy (as well as modified employment verification requiremets for certain loans). But that was all set to expire (more than once, as we’ll read below) until HUD acted to extend these measures anew. Now, with COVID-19 hot spots in the forefront of American news headlines, HUD has extended the modified appraisal guidelines (as well as employment verification rules)–they | more...

What Credit Score Is Needed For An FHA Mortgage?

June 24, 2020

Coronavirus And Home Loan Appraisals: What You Need To Know Now

By Joe Wallace

In the age of social distancing, getting a home loan might seem challenging, but the industry has tried to change with the times and there are contact-free closing procedures, online document submission, and alternative appraisal methods in effect. Some of these measures serve as a reminder that a borrower should always pay for the optional home inspection and never rely on any other viewing of the home including the appraisal for that information. Relaxed Appraisals Why? Due to the relaxed requirements for appraisals during COVID-19. FHA appraisers can do some appraisal work as “drive-bys” where the appraiser never steps in the home; some work is accomplished video tours or walkthroughs. The appraiser may never enter the home personally depending on the housing market, local social distancing procedures, the severity of | more...

May 14, 2020

FHA Appraisal Rules You Should Know Today

By Bruce Reichstein

The FHA appraisal is a requirement of the home loan process; it is designed to help establish current market value of a property based on the latest property values, the overall condition of the home and property, etc. An appraisal is NOT the same as the separate, borrower-funded home inspection. Appraisals are nowhere near as in-depth as inspections and the results of the appraisal should not be mistaken for a home inspection. Appraisals are required for all forward mortgages. Recent changes to appraisal rules in 2020 in response to social distancing required by the COVID-19 novel coronavirus pandemic make the process operate differently than before temporarily. In March of 2020, the FHA and HUD issued a Mortgagee Letter announcing situational changes to the appraisal requirements that included the ability to | more...

March 30, 2020

FHA Announces Modified Appraisal Rules During Coronavirus Outbreak

By Bruce Reichstein

The FHA and HUD have modified certain FHA appraisal requirements in response to the coronavirus outbreak and the need for social distancing. Since the outbreak of coronavirus and the worldwide pandemic that followed, government agencies began issuing policies to accommodate the need to prevent gatherings of people which potentially spreads the virus farther and wider. In the home loan industry, many are at risk including appraisers who must (under normal conditions) enter the homes of strangers and potentially expose themselves to infection. At the end of March, the FHA and HUD issued a press release announcing changes in FHA appraisal policy to address the needs to get appraisals done without exposing people to additional risks. That announcement including a set of temporary modifications to FHA appraisal requirements for single-family home | more...

November 7, 2019

FHA Loan Rules For Appraisals: Appliances, Mechanical Systems In The Home

By Joe Wallace

HUD 4000.1, the FHA Single-Family Loan Handbook, has a detailed section about FHA loan appraisal requirements. First-time home buyers may not realize that certain details of the home must meet FHA requirements such as the condition of appliances and the efficiency of the mechanical systems in the home such as central air conditioning or hot water heaters. HUD 4000.1 lists FHA requirements for appliances in the appraisal, stating that the FHA appraiser is required to review the home’s stove, fridge, washing machine, etc. if those appliances are being left in the home for the new owner. “Appliances that are to remain and that contribute to the market value opinion must be operational. ” This section is discussing appraisals for existing construction homes, but the intent is clear; the condition of | more...

October 10, 2019

New Housing Appraisal Rules? Not So Fast, FHA Loans

By Joe Wallace

If you haven’t paid attention to recent headlines in the mortgage finance sector, you may not be aware that starting October 9, 2019, some house sales priced at or below $400,000 no longer require an appraisal. That news has some house hunters and home sellers jumping for joy. At least at first. Since the mid 1990s, appraisals have not been required for each and every home sale. Homes priced at or below $250 thousand may or may not have required an appraisal (more on that below), but over time, the numbers have shown that home prices have gone up significantly since then. Hence the move to change the appraisal threshold. The FDIC, in partnership with two other government agencies issued the proposal to increase the appraisal limit, the rule was | more...

August 26, 2019

FHA Loan Appraisals: Different Rules For Different Homes

By Bruce Reichstein

FHA loan appraisals have different standards depending on the type of property you wish to buy. That doesn’t mean that some homes get favorable treatment in the appraisal process than others. What it does mean is that some properties have unique issues. For example, an appraisal for an FHA condo won’t be the same as for a manufactured home. One reason? Manufactured homes do not start off with permanent foundations, and having one is a requirement. A condo unit does not face such problems, so there is a specific appraisal requirement for manufactured housing that such homes be affixed to a permanent foundation that meets FHA and federal standards. A condo unit is already on a foundation, so the requirements there have more to do with the state of the | more...

July 1, 2019

FHA Home Loan Questions: Appraisals

By Joe Wallace

Do you have questions about the FHA appraisal process? Many do and it’s no surprise why-the appraisal is the process that determines whether the home you want to buy meets minimum FHA standards or not. Here are some common appraisal questions and answers you should know before you get to that part of the home loan process. Whether you are a first-time home buyer applying for your first FHA mortgage or an experienced house hunter returning to the FHA loan program to buy a new primary residence, these questions are important. Who Is Responsible For Ordering The FHA Appraisal? The lender. The borrower does not initiate the appraisal process or select the appraiser. Who Pays For The Appraisal? The borrower is responsible for paying the cost of the FHA appraisal | more...