Articles Tagged With: FHA Appraisals

September 9, 2022

Article Update: FHA Appraisal Refunds

Back in 2012, we wrote an article discussing the FHA appraisal process, and whether it’s possible to get a refund from an appraiser if a property is not approved for an FHA mortgage or when the home’s appraised value comes back different than expected. When we addressed this question, which we are asked from time to time, the going advice was that in cases where a buyer disagrees with the outcome of the appraisal, the fee must still be paid. What’s the reality in 2022? When you find a house you want to buy with an FHA home loan, there must be an appraisal. This process is non-negotiable; the appraisal helps to determine the FHA loan amount which is based on the fair market value of the home, not necessarily | more...

August 24, 2022

Article Update: FHA Loan Appraisal Rules For Central Heating and Air Conditioning Systems

By Bruce Reichstein

In 2017, we asked an important appraisal question. We asked, “What are the FHA loan appraisal rules for central heating and air conditioning systems? Does a house need to have central air/heating to be FHA approved?” There were two answers to this question back then and the same issues apply today. In HUD 4000.1, we learn the following about the appraisal requirements for heating systems and central air conditioning units, including the following requirement: “The Appraiser must examine the heating system to determine if it is adequate for healthful and comfortable living conditions, regardless of design, fuel or heat source. FHA loan rules say the Appraiser must notify the Mortgagee of a deficiency if the permanently installed heating system does not: “Automatically heat the living areas of the house to | more...

August 12, 2022

Refinancing a Conventional Loan To An FHA Mortgage

By Joe Wallace

Some borrowers want to know: is it possible to refinance out of a conventional mortgage using an FHA refinance loan? It’s a smart question to ask, especially if you are interested in moving out of an adjustable-rate mortgage and into the predictability of a fixed-rate loan. FHA Refinance Loan Options FHA loan rules do permit you to refinance a conventional mortgage using an FHA cash-out refinance loan. But that’s not your only option. The FHA loan handbook, HUD 4000.1, says your options for FHA refinancing include non-FHA to FHA transactions. What kinds of refinance loan options are available? In general: Cash-out refinances to help you pull equity out of your home; No cash-out refinances for both FHA and non-FHA-insured Mortgages. These loan options include Rate and Term refinance, and FHA | more...

August 3, 2022

Appraisal Rules For FHA Loans: Basements & Crawlspaces

By Joe Wallace

When reviewing your closing checklist or simply trying to plan for all the expenses of your FHA home loan, the appraisal and the optional (but vital) home inspection are two of the expenses you’ll need to save for. The appraisal is required as a condition of loan approval, the inspection is optional but borrowers cannot make a truly informed decision about a home without the inspection. When it comes to FHA appraisal requirements, the rules are designed only to insure the property meets MINIMUM FHA standards. The appraisal is never to be taken as a message from the FHA that the home is free of defects or problems-only an home inspection can tell you what the true condition of the property might be. FHA minimum standards for appraisals include requirements | more...

July 26, 2022

HUD Announces Results Of New York Fair Housing Case

By Joe Wallace

Any form of discrimination in the housing process whether buying or renting has a chilling effect on the entire housing industry. We write about Fair Housing Act cases frequently to remind house hunters of their rights under the law. One of the latest developments in this area involves the Department of Housing and Urban Development’s involvement in a Fair Housing Act case in Long Island, New York. HUD announced in July 2022 that an Administrative Law Judge delivered a decision finding Long Island landlord Alex Raimos guilty of violating the Fair Housing Act, ordering Raimos to pay some $70 thousand in penalties and damages. This Fair Housing case began because the landlord refused to rent “to a mother and her daughter because of the daughter’s cerebral palsy” according to a | more...

July 14, 2022

HUD Announces Appraisal Update

By Joe Wallace

The Department of Housing and Urban Development official site contains an FHA Mortgagee Letter published on July 12, 2022, which announces an important update to FHA appraisal policy. FHA loan rules as published in HUD 4000.1, include a maximum age for an appraisal. If an appraisal is about to expire, FHA rules permit an extension of the appraisal validity period for 30 additional days. In some cases, an appraisal update may be permitted but that update must typically be accomplished before the original appraisal expires. Now, FHA appraisal guidelines have been revised to expand the appraisal validity period, which the FHA and HUD say will reduce “financial burdens” of getting appraisal updates. The changes are also meant to help the agency “more closely align” the FHA loan program’s initial appraisal | more...

May 19, 2022

Appraisals, Home Inspection, And The Systems Of Your House

By Joe Wallace

We write a great deal about not using the FHA appraisal to determine the condition of the home you want to buy with an FHA mortgage. But why do we say this? Why can’t you trust the appraisal alone? Why pay for the home inspection? There are important reasons for homebuyers to pay for a home inspection as well as the appraisal. Here are some things you should think about before you decide to skip a home inspection. The Foundation of Your Potential New Home Your FHA appraiser is not required to be an expert in areas such as the foundation of the home. Some foundation problems may not be apparent in the appraisal process. They may only be revealed during a home inspection depending on the problem. The appraiser | more...

May 4, 2022

FHA Appraisals: Facts You Should Know

By Joe Wallace

Some FHA borrowers wonder about how the appraisal works. It’s a process that can seem a bit mysterious until you understand the hows and whys. What do you need to know about FHA appraisals to help you make the most informed choices about a particular home? FHA Appraisal Facts: The Appraisal Is A Tool For Your Lender, Not For You Appraisals help the lender make sure the home meets the bare minimum standard for safety and habitability. It also helps the participating FHA lender establish the fair market value of the home. It is not a tool for the borrower in any way except to provide the dollar amount for the market value. FHA Appraisal Facts: Standards Vary What applies in one housing market may not apply in another. By | more...

March 7, 2022

Answers To New House Hunter Questions

By Bruce Reichstein

What does it take to qualify for an FHA mortgage? That’s among the most common questions asked about FHA home loans. What is the answer? There are a variety of factors that go into your loan officer’s decision to approve or deny a home loan. Those factors include the number and amount of your monthly financial obligations, your FICO scores, how well you use the credit you have, and other variables. What credit score do you need to qualify? On paper, FHA loan rules say those with FICO scores in the 580 or above range qualify for the lowest down payment possible for an FHA mortgage (3.5%). Lender standards may require a higher FICO score range. Not all borrowers have the same kind of FICO scores. Some may have thin | more...

December 15, 2021

FHA Home Loans: Not All Are “Typical” Mortgages

By Bruce Reichstein

Not every home loan application is a typical one. You might be trying to buy a home that doesn’t meet FHA loan appraisal requirements–if you try to apply with a new purchase loan you might not be approved in such cases. But if you are buying a fixer-upper home with an FHA rehabilitation loan you won’t be required to have the home pass the appraisal when the loan closes but you are required to bring it up to minimum standards as a condition of loan approval. See how choosing the right FHA mortgage can make the difference sometimes between loan approval and loan denial? There are plenty of unique situations a lender might encounter–one of them could be yours. For example, are you trying to refinance a home you inherited? | more...