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Started By
Message
FHA appraisal
Posted on 10/19/09 at 8:33 am
Posted on 10/19/09 at 8:33 am
So I'm on the selling end and am anxiously waiting the results of this. How screwed am I, and don't these people sort of act as an inspector and require you to fix stuff? I somehow made it through the home inspection without any casualties but am wondering how much stuff I'm about to get popped with...Anybody got experience with this? Are we about to be nit-picked to death with a list of stuff to fix?
2
Posted on 10/19/09 at 8:52 am to eye65
quote:
Alabama fan
You'll get a higher appraisal if you fix the flats on your double-wide.....
Posted on 10/19/09 at 8:56 am to LSURussian
haha...this would probably be true.
thanks rmc for the reply...this is what i had HOPED would be the case, but the wife has insisted that they are going to make us fix a bunch of shite. we have fought and argued over this one for about a week, so hopefully you are right and she will be happy to hear that is the case....
thanks rmc for the reply...this is what i had HOPED would be the case, but the wife has insisted that they are going to make us fix a bunch of shite. we have fought and argued over this one for about a week, so hopefully you are right and she will be happy to hear that is the case....
Posted on 10/19/09 at 11:10 am to eye65
rmc you are correct sir and i appreciate your input....got news of no required FHA repairs (so i guess they can maybe make you do repairs at times?) and the appraisal covers the price of the loan..........time for a deep breath and several beers at 5:00
This post was edited on 10/19/09 at 11:12 am
Posted on 10/19/09 at 2:09 pm to rmc
quote:
FHA appraisal is like any other appraisal..
I'm sorry but this isn't true. They are very similar, but an FHA appreaisal does require a few extra things that a 'regular' appraisal doesn't such as pictures of the HVAC, pictures of bathrooms, etc. Also, if the property is in need of a major repair, then the FHA appraisal MUST include this needed repair as part of the appraisal, where as a 'regular' appraisal will simply state the value of the property in its current condition.
Posted on 10/19/09 at 7:38 pm to MikeBRLA
False and false
FHA does not require interior photos.
Any "major" item that needs repair whether Govt loan or conventional, it must be fixed prior to closing.
You think the mort co will make the loan if the roof is bad or the HVAC is bad ?
Who has to fix it if the loan goes into default the next month ??
FHA does not require interior photos.
Any "major" item that needs repair whether Govt loan or conventional, it must be fixed prior to closing.
You think the mort co will make the loan if the roof is bad or the HVAC is bad ?
Who has to fix it if the loan goes into default the next month ??
Posted on 10/20/09 at 1:43 pm to Drop4Loss
Well FHA appraisals have additional requirements. I work with an appraiser and showed me the forms with the additional requirements. Things like turning on the HVAC, looking for cracks on the exterior foundation, turning on the oven, testing the water temperature.
Second I purchased a home in July and got a conventional mortgage. During the inspection period we found out that the homes electrical was not up to code. Our mortgage company could have cared less but as purchasers we knew this was a barging tool, as it would have eliminated that seller from FHA buyers. The seller agreed to reduce the selling price and we had the electrical service upgraded prior to moving in.
One thing I am not 100% sure of is that the seller cannot opt to place money in escrow so the repairs can be fixed after act the of sale. From what I understand all repairs must be made prior to act of sale and re-inspected.
Second I purchased a home in July and got a conventional mortgage. During the inspection period we found out that the homes electrical was not up to code. Our mortgage company could have cared less but as purchasers we knew this was a barging tool, as it would have eliminated that seller from FHA buyers. The seller agreed to reduce the selling price and we had the electrical service upgraded prior to moving in.
One thing I am not 100% sure of is that the seller cannot opt to place money in escrow so the repairs can be fixed after act the of sale. From what I understand all repairs must be made prior to act of sale and re-inspected.
Posted on 10/20/09 at 1:54 pm to eye65
Hmmm just had an FHA inspection done on a property Im buying.. Had an inspection as well. Didnt see anywhere in the appriasal that they tested anything. They just did comparisons in the market and came up with a value. It came in high so there was nothing to worry about. They did take a lot of pictures to put in the report though. I dont exactly agree with the appriasers findings either though even though it came in higher than selling. They used some homes for sale that I have looked at and the value used for those houses was BS. They only had one house within 4.6 miles as a comparison and that house wasnt on a lake. The others were in a neighborhood that has like 20 houses for sale and really far away.
Also was someone supposed to tell the seller what it came in at??? I was under the impression that the bank ordered the appraisal and had full rights to it..
Also was someone supposed to tell the seller what it came in at??? I was under the impression that the bank ordered the appraisal and had full rights to it..
This post was edited on 10/20/09 at 2:04 pm
Posted on 10/20/09 at 2:15 pm to DieSmilen
quote:
Well FHA appraisals have additional requirements. I work with an appraiser and showed me the forms with the additional requirements
Thank you. Anyone who says otherwise simply doesn't know what they are talking about. Ask any appraiser who does them and they will tell you the same thing. I have bought and sold many properties that were financed via FHA loans and every time the appraiser says something to the effect of "well, since this an FHA deal I have to do X, Y, Z extra since X Y Z are required for the FHA program.
This post was edited on 10/20/09 at 2:19 pm
Posted on 10/20/09 at 3:11 pm to MikeBRLA
quote:
Thank you. Anyone who says otherwise simply doesn't know what they are talking about. Ask any appraiser who does them and they will tell you the same thing. I have bought and sold many properties that were financed via FHA loans and every time the appraiser says something to the effect of "well, since this an FHA deal I have to do X, Y, Z extra since X Y Z are required for the FHA program.
You are correct..
Form required in addition to regular apprsial is Market Conditions Addendum. This has several items on it that must be inspected where as this form is not required on conventional apprasials..
Posted on 10/20/09 at 8:22 pm to TigersD69
Wrong and wrong again, the appraiser is not an inspector and it is not in his scope of work to inspect water pressure, HVAC condensor unit etc.
Wrong and wrong again, market conditions form is required for ALL residential loans. FHA, VA & conventional.
Utilities must be on for FHA appraisals. "VC" sheets are no longer required.
No home loan requires all to be up to code. Is it safe, is it sound, is it functional, is it to typical current market standards of similar competing properties.
Not many 40 year old homes are up to "current" code, but they are sold FHA/VA everyday...
Wrong and wrong again, market conditions form is required for ALL residential loans. FHA, VA & conventional.
Utilities must be on for FHA appraisals. "VC" sheets are no longer required.
No home loan requires all to be up to code. Is it safe, is it sound, is it functional, is it to typical current market standards of similar competing properties.
Not many 40 year old homes are up to "current" code, but they are sold FHA/VA everyday...
This post was edited on 10/20/09 at 8:31 pm
Posted on 10/20/09 at 9:05 pm to Drop4Loss
I never said the appraiser is a home inspector. I said it was required for FHA loans.
As far as being up to code on the other hand as I pointed out my conventional mortgage could care less about my electrical being out of code.
This is from the HUD/FHA website , once again they are not inspectors but are required to do the following
Checking Mechanical Systems - Please see: Mortgagee Letter 2005-48 An appraiser must examine mechanical, plumbing and electrical systems to ensure they are in proper working order. The appraiser should turn on the systems and observe their performance. The appraiser may call for a certification of a system when he/she cannot determine if it is working properly. An appraiser should not arbitrarily call for such certifications and should understand that they are still responsible for checking on the adequacy of these systems at the time of appraisal. For 2-4 units, note the type of heating and cooling for each unit, if different. Do not operate the systems if doing so may damage equipment, or when outside temperatures will not allow the system to operate. Note in the appraisal report why the system(s) could not be tested.
As far as being up to code on the other hand as I pointed out my conventional mortgage could care less about my electrical being out of code.
This is from the HUD/FHA website , once again they are not inspectors but are required to do the following
Checking Mechanical Systems - Please see: Mortgagee Letter 2005-48 An appraiser must examine mechanical, plumbing and electrical systems to ensure they are in proper working order. The appraiser should turn on the systems and observe their performance. The appraiser may call for a certification of a system when he/she cannot determine if it is working properly. An appraiser should not arbitrarily call for such certifications and should understand that they are still responsible for checking on the adequacy of these systems at the time of appraisal. For 2-4 units, note the type of heating and cooling for each unit, if different. Do not operate the systems if doing so may damage equipment, or when outside temperatures will not allow the system to operate. Note in the appraisal report why the system(s) could not be tested.
Posted on 10/20/09 at 9:50 pm to Drop4Loss
quote:
Wrong and wrong again, the appraiser is not an inspector and it is not in his scope of work to inspect water pressure, HVAC condensor unit etc.
Nobody ever said they had to check the condensor or water pressure. They do in fact have to check the heater and the water heater though.
quote:
No home loan requires all to be up to code.
I never said that they did.
quote:
Not many 40 year old homes are up to "current" code, but they are sold FHA/VA everyday...
I never said any different. They do have to have a working heater and water heater per FHA guidelines, this is why the appraiser has to check these things for an FHA loan.
Drop4Loss, I guess every appraiser I know lied to me and every FHA appraisal I have ever ordered was just made up then right?
I noticed you haven't provided any links to back up the "Wrong, Wrong, Wrong" rhetoric you keep spewing here. Keep that kind of talk on the Rant or OT please.
Below are links that back up what others and I have said confirming that FHA appraisals are different from conventional ones.
LINK with references straight from HUD
LINK
LINK
LINK
LINK
I guess you think that all of these sites explaining the differences between an FHA and Conventional appraisal are wrong too? (Google had 680,000 results for the search by the way)
Posted on 10/20/09 at 9:54 pm to DieSmilen
HVAC "proper working order". Again the appraiser must ensure that the unit "turns on". He is not to temperature check the air flow or velocity. Is it working properly at the time of inspection, does it appears to be in proper working order.......
"All 1004" report forms are the "same". FHA does not require and has no additional report forms that are reported to the client other than those for conventional loans.
"All 1004" report forms are the "same". FHA does not require and has no additional report forms that are reported to the client other than those for conventional loans.
This post was edited on 10/20/09 at 9:55 pm
Posted on 10/20/09 at 10:09 pm to Drop4Loss
quote:
Wrong and wrong again, market conditions form is required for ALL residential loans. FHA, VA & conventional.
i mis-typed. I am aware the form is required on all appr I simply meant to say FHA requires "extra specifics"
Mike...please see below what I pulled and condensed from "myfannie.com" and the "FHA connection".
Conventional FNMA 1004
Similar to FHA, but less specific. FNMA permits an appraisal to be based on the "as-is" condition of the property as long as no adverse conditions exist that affect the livability, soundness, or structural integrity of the property. When conditions exist that affect the livability, soundness, or structural integrity of the property, the property must be appraised subject to completion of the specific alterations or repairs ("as-repaired").
In addition, the lender must obtain a completion report from an appraiser that confirms that the alterations or repairs have been performed and support the "as-repaired" value of the property, before it delivers the mortgage to FNMA.
FHA 1004
FHA is specific about how the value opinion is reported.
The “As-Is” value can be reported when:
There are no required repairs/alterations (as noted in the condition comments).
Inspection conditions are noted by the appraiser.
The property is being recommended for rejection.
The value opinion must be “Subject to completion per plans and specs” if:
The subject property is Proposed Construction where construction has not started, or
The subject property is under construction but not yet complete (less than 90%), or
The subject property is a rehab – Regular 203(k).
The value opinion must be “Subject to Repairs or Alterations” if:
The subject property has repair or alteration condition(s) noted by the appraiser, or
The subject property is a rehab – Streamline 203K, or
The subject property is Under Construction, more than 90% complete with only minor finish work remaining (buyer preference items - examples: floor coverings, appliances, fixtures, landscaping). This eliminates the need for construction exhibits.
The value opinion must be “Subject to Inspection” if:
Required inspection(s) noted by the appraiser
Examples of conditions that require automatic inspections include, but are not limited to:
Standing water against the foundation and/or excessively damp basements
Hazardous materials on the site or within the improvements
Faulty or defective mechanical systems (electrical, plumbing, or heating)
Evidence of possible structural failure (for example, settlement or bulging foundation wall)
This post was edited on 10/20/09 at 10:13 pm
Posted on 10/21/09 at 1:13 am to TigersD69
OK let me clear this up.
FHA appraisals are completed on the same form as a conventional appraisal but require additional verbage stating that the property meets certain HUD guidelines.
Appraisers are not inspectors but are required to check the mechanincal and electrical systems in the house to make sure there is no major damage.
I.E. turning on the faucet is a pretty good indicator whether or not the cold and hot water are working as well as draining like they should. Or flipping on a light switch is a pretty good indicator that both that electrical switch or outlet are working. If they have central HVAC and you see three window units then chances are there is something wrong. In which case flip on the A/C and continue your inspection and in a few minutes you will know if it is working.
"As-is" versus "subject-to" can be applied to both. This is usually known before the appraiser is sent out to the property. But it is solely up to the appraiser how an appraisal should be completed.
The market conditions report a.k.a 1004mc is just that. It is now required for all forms unless otherwise stated by the lender. It states the market conditions for the immediate subject market, be it an established suburban neighborhood or a rural property based on the sold/active listings for the previous 12 months.
FHA appraisals are completed on the same form as a conventional appraisal but require additional verbage stating that the property meets certain HUD guidelines.
Appraisers are not inspectors but are required to check the mechanincal and electrical systems in the house to make sure there is no major damage.
I.E. turning on the faucet is a pretty good indicator whether or not the cold and hot water are working as well as draining like they should. Or flipping on a light switch is a pretty good indicator that both that electrical switch or outlet are working. If they have central HVAC and you see three window units then chances are there is something wrong. In which case flip on the A/C and continue your inspection and in a few minutes you will know if it is working.
"As-is" versus "subject-to" can be applied to both. This is usually known before the appraiser is sent out to the property. But it is solely up to the appraiser how an appraisal should be completed.
The market conditions report a.k.a 1004mc is just that. It is now required for all forms unless otherwise stated by the lender. It states the market conditions for the immediate subject market, be it an established suburban neighborhood or a rural property based on the sold/active listings for the previous 12 months.
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