Articles Tagged With: FHA Appraisal Rules

June 16, 2019

Six FHA Home Loan Tips

Know Your FHA Home Loan Limits All housing markets are subject to variations, and not all of them have the same costs or median house prices. And not all housing types are available in a given market. The home in California averaging at one price range won’t be the same as a housing market in a less expensive area. FHA home loan limits for high-cost and low-cost areas are adjusted rather than featuring an one-size-fits-all approach, and those limits are adjusted annually. You should always check the current loan limits before committing to a new home loan to see what you can expect in your chosen market. FHA Loans May Be Available With Adjustable Mortgage Rates and You Can Always Choose A Fixed Rate Loan Instead The fixed-rate FHA mortgage | more...

May 30, 2019

FHA Appraisal Rules You Need To Know

By Bruce Reichstein

Are you a first-time home buyer? Are you looking into your FHA home loan options and not sure what the appraisal process is all about? The FHA appraisal is a tool for the lender to determine the home’s fair market value and a way to make sure a property meets MINIMUM standards. No matter what you might hear (and some mistakenly call the appraisal an “inspection”) the appraisal will not tell you the true condition of the home. Even the FHA and HUD themselves warn borrowers to pay for the optional home inspection (which is technically not a requirement, but then again, neither is test-driving your car before you buy it). And what should borrowers know about the FHA appraisal process? The appraisal’s most important feature for some borrowers is | more...

May 23, 2019

Home Values Dropping: FHA Loan Rules You Should Know

By Joe Wallace

Real estate values could be entering a new phase if some real estate blogs are to be believed; a Zillow.com report notes that median home values declined a bit in the spring of 2019. A different online real estate publication notes, “Though values didn’t drop year-over-year, their growth rate to (sic) lag behind 2018’s number.” That information does not necessarily help or hurt a house hunter looking for an FHA mortgage and a home to buy at the moment, but there are some important FHA loan rules to remember that WILL help you in cases where property values or house prices are in a state of decline. Where are values going lower according to Zillow? How about San Francisco? Pittsburgh? Others named include Seattle, Los Angeles, and San Diego. You | more...

May 21, 2019

Questions A First-Time Home Buyer Should Ask The Seller

By Bruce Reichstein

First-time home buyers and those who have purchased a home before but haven’t had to explore housing markets in a while should make a list of questions to ask the seller of a home placed on the real estate market. Sometimes it’s not the answer to the questions as much as the way the seller answers those questions-your ability to ask important questions in those cases is important, but so is paying attention to how the questions get answered. For example, the question, “Has the roof ever been replaced or repaired?” may get you a direct answer; “No, nothing has ever gone wrong with the roof”. But if the seller hesitates or offers a less-than-forthcoming answer, such as, “I don’t remember anything going wrong with the roof” or “No, the | more...

May 17, 2019

FHA Loan Appraisal Questions: Why Is Peeling Paint A Problem?

By Joe Wallace

One common question about FHA appraisals involves the issue of peeling paint. This can be a problem for some homes, especially those built on or before the year 1978. Borrowers want to know why the appraiser reviewed the home (the appraisal is not a property inspection) and required a correction of a peeling paint issue as a condition of loan approval. The borrower’s question in these cases is normally a variation on, “It’s just a cosmetic issue, why is the appraiser making a big deal out of peeling paint?” Unfortunately, for homes (including condo units) built on or before 1978, peeling paint is not just a cosmetic problem due to the use of lead paint in those construction projects before it was recognized as a safety hazard. FHA home loan | more...

May 8, 2019

FHA Loan Appraisal Issues: Environmental Concerns

By Bruce Reichstein

The FHA appraisal requires attention to a variety of areas in and around the home, but one aspect of the appraisal has to do with assessing safety hazards and environmental issues that could interfere with the borrower’s ability to use the home. In the case of these FHA appraisal rules, the term “environmental” refers specifically to the areas in and around the home. HUD 4000.1, the FHA loan handbook, begins addressing these concerns by instructing the lender: “The Appraiser must report known environmental and safety hazards and adverse conditions that may affect the health and safety of the occupants, the Property’s ability to serve as collateral, and the structural soundness of the improvements”. Such hazards can include lead-based paint, mold, chemicals, and other hazards. One recent addition to the HUD | more...

April 3, 2019

FHA Home Loan Appraisal Issues

By Bruce Reichstein

We are contacted frequently with questions related to FHA appraisals. Many first-time borrowers and experienced house hunters alike have trouble understanding the nature of the appraisal process and how it works. We are often asked if a certain appraisal condition is grounds for having the loan denied, and whether FHA home loan appraisal rules fit a unique circumstance. But whatever the question, the variable in the equation is the fact that FHA appraisal rules, which are basically minimum requirements, are not the only rules that will affect the transaction. So even if FHA appraisal requirements say that a home that has lead-based paint may be acceptable under certain conditions, state or local building code may have additional requirements. And the building code requirement in that area would have to be | more...

March 22, 2019

FHA Home Loans For Homes Built Before 1978

By Bruce Reichstein

FHA home loans are offered for a variety of home needs including building a house from the ground up with an FHA One-Time Close construction loan, but there is also an option to use your FHA mortgage to buy an older home that is not considered new construction. In cases where the property is older than 1978, there are some additional rules regarding the potential for lead paint in the residence that all borrowers thinking about buying older property should be aware of. FHA home loan rules in HUD 4000.1 point out that any home built prior to 1978 must include disclosures to the buyer: “…the seller must disclose any information known about lead-based paint and lead-based paint hazards before selling the house, in accordance with the HUD-EPA Lead Disclosure | more...

March 6, 2019

What You Need To Know About Home Loan Appraisals As A First-Time Home Buyer

By Joe Wallace

What do first-time home buyers need to know about real estate appraisals when it’s time to make an offer on a home? Your real estate agent and lender know the power of the appraisal-do you? FHA Home Loans Require An Appraisal For Most Transactions There is only one kind of FHA mortgage loan that has no FHA-required appraisal, called the FHA Streamline Refinance loan. All others will need an appraisal to determine the fair market value of the home. The Appraisal Is A Tool For The Lender Borrowers should not use the appraisal to determine whether the home has defects or hidden problems. No matter what you may be told by others, the appraisal process is not intended to help the borrower decide whether or not the home is ok | more...

February 12, 2019

FHA Home Loan Rules For Sellers

By Joe Wallace

What do sellers need to know about FHA home loans? There are several areas that you should know when negotiating with a first-time home buyer or an experienced real estate owner. One excellent example; when the home is appraised for an FHA mortgage loan, if the appraisal values the home at a dollar amount lower than the sale price, the borrower cannot be forced to complete the transaction. She has the option to walk away from the loan. This option is described in HUD 4000.1 which instructs the lender that a clause must be inserted into any sales contract involving an FHA mortgage that includes the following; “It is expressly agreed that notwithstanding any other provisions of this contract, the purchaser shall not be obligated to complete the purchase of | more...