Articles Tagged With: FHA Appraisals

FHA Home Loan Rules For Construction Loan Escrow Accounts

December 28, 2020

FHA Home Loan Options: Build Or Buy A Home In 2021

Do you want to own your own home in 2021? The FHA Single-Family home loan program is an excellent option for future homeowners who want to build or buy a home in the new year. What are your options for buying a house with an FHA mortgage? Those who have good credit (620 or better) and are not in a hurry to move in as soon as possible should consider applying for an FHA One-Time Close (OTC) construction loan to build a home from the ground up on your own land or on a lot you buy in conjunction with the construction loan. Another option for those who aren’t in a hurry to move in is the FHA 203(k) Rehabilitation mortgage, which is intended to help you buy a fixer-upper | more...

October 22, 2020

FHA Mobile Home Loans

By Bruce Reichstein

FHA mortgages can be used to purchase or build a variety of properties and one of those property types is the mobile home. You can use an FHA mortgage to purchase mobile homes, manufactured homes, modular housing and similar types. FHA loan rules in HUD 4000.1 group these types of mortgages together under the “manufactured housing” description. Not all manufactured housing or mobile homes are eligible for an FHA mortgage. HUD 4000.1 has certain criteria that must be met for the loan to be approved. Those requirements include, but are not limited to being a single-family dwelling with at least 400 square feet of floor area; the property must have a HUD Certification Label. Alternately, instead of the label, there must be a letter of label verification issued on behalf | more...

FHA Loan Questions: Eligible Property Types

October 5, 2020

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

By Joe Wallace

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...

September 10, 2020

FHA Appraisal Rules: What You Should Know

By Bruce Reichstein

The FHA appraisal process is a requirement. You can’t purchase a home with an FHA mortgage unless there has been an appraisal on the property to determine the fair market value of the home and to ensure the property meets FHA minimum standards. Today’s appraisal standards for FHA home loans do NOT include stepping out onto the roof or physically entering difficult-to-access spaces, which is why you should never purchase a home without arranging a home inspection. The appraisal requirements for your home purchase can be found in HUD 4000.1. These requirements apply to proposed construction, new construction, and existing construction properties. According to HUD 4000.1, “The Mortgagee must evaluate the appraisal and any supporting documentation to determine if the Property complies with HUDs Property Acceptability Criteria. Existing and New | 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...

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...

May 11, 2020

Buying A House In The Era Of COVID-19

By Joe Wallace

Who buys a house during a global pandemic? The answer to that question may surprise you at first, but a quick look at the official site for the Department of Housing and Urban Development and it’s clear that there’s a demand, and with good reason. Some Americans not only consider buying or renting a new home during COVID-19, but some actually have no choice but to seek new housing. This could be due to any number of factors including illegal evictions, loss of income, job changes that require relocation, natural disasters, changes in family size, changes in marital status, many reasons. And those people create a demand that must be met, even during a national emergency. Granted, not all home loans during this time are out of necessity, but the | more...

HUD Brings Fair Housing Act Charges Against Atlanta Landlords

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...