If you’re looking to buy a home using a government-backed mortgage, you need to know about FHA appraisals. This process determines whether the property meets certain standards and criteria that the Federal Housing Administration sets. The appraisal is also used to determine the property’s value. As a first-time buyer or seller, it’s important to know what factors an appraiser looks at. This article will discuss FHA appraisal guidelines and checklists in more detail!
What is a Home Appraisal?
If you’re using an FHA mortgage loan to purchase a house, the property must be appraised by a professional appraiser. This process is used to determine whether the home meets certain standards set by the Federal Housing Administration. The appraisal is also used to determine the property’s value.
The FHA lenders use the appraisal to calculate the loan’s loan-to-value ratio. For example, to make sure the borrower isn’t paying more than the property’s fair market value, first-time buyers or sellers need to know the different factors that home appraisers look for.
What Does an FHA Appraiser Look for?
There are many different factors that an appraiser looks at when assessing a property. Some of these factors include:
- The property’s condition
- The location of the property
- The size of the property
- The age of the property
- Any recent improvements or renovations to the property
The appraiser will also look at comparable properties in the area to help determine the value of the subject property. In addition, they will consider any special features or amenities that the property has to offer.
FHA Appraisal Guidelines
There are also specific FHA appraisal guidelines that the appraiser must follow. These guidelines are in place to ensure that the property meets minimum standards for safety and habitability. Some of these standards include:
- The property must be free of any health and safety hazards
- The property must have adequate access to utilities
- It must have adequate heating, ventilation, and air conditioning
- The property must be structurally sound
If the appraiser finds that the property does not meet these standards, they will issue a report detailing the necessary repairs. The buyer then can make the repairs themselves or negotiate with the seller to have the repairs made before closing on the property.
FHA Appraisal Checklist
It’s important for buyers and sellers to be familiar with the FHA appraisal process and what is required for a successful outcome. To help you prepare, you will need an FHA appraisal checklist. This checklist is a tool that will help to make sure that you have all of the necessary documentation and information gathered before the appraiser arrives.
What Should Your FHA Appraisal Checklist Contain?
During an FHA home inspection, the appraiser will inspect and note the safety concerns that they find. To help make sure the home is ready for FHA inspection, make sure your checklist contains the following items:
The appraiser will check the level of risks to ensure the homebuyer is protected from undesirable outcomes. When preparing for an FHA home inspection, make sure you check for the following:
- Environmental hazards and health risks
- The structural integrity of the property
- Electrical installation and utilities
- Lead-based paint and other potential chemical hazards.
Assessing the market value of a property also requires an appraiser to consider the security of the home. Therefore, an FHA checklist should include items such as:
- Doors, locks, and windows
- Smoke detectors and carbon monoxide detectors
- Fire extinguishers
- Security systems
- Water supply shortage
- Grading and draining problems
- Physical and visual condition of the home.
- Road accessibility
For a property to be eligible for an FHA loan, it must have adequate access to utilities. This includes water, electricity, gas, and sewer. Therefore, an FHA checklist should include items such as:
- Water supply and quality
- Sewage disposal
- Heating and cooling systems
- Gas service lines and meters
- Electric service lines and meters.
Appraisers will also ensure that the property doesn’t have any physical deficiencies that will affect its overall structural integrity. For example, make sure your property doesn’t have the following damages:
- Sinkholes or natural depressions
- Multiple large cracks on the floor and walls
- Roof gutter leaks
- Pest infestations
Other areas that you need to check include the following:
- A leaky roof and visible holes in the siding
- Broken or leaning fence system
- Doors that don’t open or close properly.
- Condition of chimney, gutters, stairs, porches, and railings.
- The swimming pool (if there is one) is up to code.
- Each room should have electricity.
- Each room has a window or door to the exterior to be used as a fire escape route.
- Missing or broken kitchen appliances are usually sold with the home (e.g., built-in refrigerator, stove).
- Leaking sink.
- No ventilation (window or exhaust fan)
- Broken toilet
- Leaking sink or bathtub
- Defective shower system
- Moisture is present in some areas.
- Evidence of water damage.
- Heating and Plumbing
- HVAC system is non-operational
- Major plumbing leaks.
As you can see, there are many different factors that an FHA appraiser must consider when assessing a property. By familiarizing yourself with the appraisal process and having a checklist of required items, you can help to ensure a successful outcome for your FHA loan.
Create an FHA Appraisal Checklist with DataMyte Digital Clipboard
If you’re looking to create an FHA appraisal checklist to prepare for your home appraisal, DataMyte has you covered. With our Digital Clipboard, you can easily create a checklist that includes all required items for an FHA appraisal.
Our checklist and smart forms builder will let you create comprehensive FHA checklists that will help you inspect and resolve the issues in your property before the appraisers arrive. You can even add other elements such as timestamps, photos, bar codes, signatures, and geo tracking for overall data accuracy.
With the DataMyte Digital Clipboard, we’ve got all the tools necessary to create an FHA appraisal checklist for your needs. Visit our website now to learn more!
If you’re planning on buying a home with an FHA-backed mortgage, it’s important to be aware of the FHA appraisal guidelines. These guidelines exist to protect both buyers and sellers from fraud and ensure that the home meets minimum standards for health and safety. So whether you’re planning to buy or sell a property, make sure that it’s ready for inspection by using an FHA appraisal checklist.