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There are a lot of questions first-time home buyers have about the FHA appraisal process. Many of these questions have similar answers, and some of them have exactly the same answer-it all depends on variables that are outside the scope of FHA home loan program rules for the appraisal.

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FHA Appraisal Questions and Answers

FHA Appraisal Questions and Answers
June 25, 2019 - There are a lot of questions first-time home buyers have about the FHA appraisal process. Many of these questions have similar answers, and some of them have exactly the same answer-it all depends on variables that are outside the scope of FHA home loan program rules for the appraisal.

Here are some of the most common.

I notice pooling water in parts of the basement. Will this disqualify the home for an FHA mortgage?

It depends on the cause for the water, but at a minimum evidence of excessive moisture will require a correction. If there is no way to repair or correct, the home may be unsuitable for a mortgage loan.

The property is not currently hooked up to the local water utility but uses a well. Is the home eligible for an FHA mortgage?

The answer to this question will depend on whether or not the well meets local health and safety standards. The FHA defers to the local authority on health issues, so you will need to consult that local authority to see what is considered acceptable.

The house I want to buy is zoned for residential and commercial. Will this be a problem?

In cases like these, the home must be primarily residential in nature and any non-residential use must not interfere with the use of the property as a residence. State and local law will apply here, so you will need to consult the local authority.

Why did the appraiser require corrections for peeling paint? It’s a cosmetic issue!

This will depend greatly on the age of the home. In the eyes of the FHA peeling paint is NOT a cosmetic issue if there is a potential lead paint hazard. Homes built on or before 1978 will require corrections of peeling paint as a health issue. State and local building code will also apply.

The appraisal came in too low. Can I get a do-over?

FHA loan rules do not permit a second appraisal because the valuation is not what the owners or borrowers expected. If there are material defects in the original appraisal that may be grounds to apply for a second one, but not a simple disagreement about the value of the property.

For all appraisal issues, local and state building code must be satisfied regardless of FHA appraisal rules since FHA loan rules cannot override state or local law.

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