FHA Appraisal Requirements

In order to obtain an FHA loan a thorough FHA appraisal is required. HUD mandates minimum requirements and guidelines that must be adhered to strictly in order to close a FHA loan. HUD allows only certified appraisers to complete appraisal reports. The appraisers are required to take special courses and follow special guidelines. There are a few standards that HUD mandates:

1. An appraiser from an FHA approved list must be used. This list includes appraisers that are knowledgeable about the FHA requirements and properly licensed and certified. Usually the lender chooses an appraiser from the published list; however, the borrower has the option to choose as well.

2. Certain property conditions require an inspection. These include foundation issues, structural damage, electrical and plumbing concerns. A cost to cure must be provided for any major defects or damage. An appraiser must outline all defects and provide a comprehensive list of costs required to bring property up to HUD standards.

3. No immediate repair is required for the following conditions:

  • Small plumbing leaks
  • Bad carpet
  • Cracked windows

4. Immediate repair is required for the following conditions:

  • Leaking roof
  • Structural damage
  • Insufficient exterior access
  • Utilities must be turned on at time of inspection

The appraiser will value the home based on its current condition. The borrower can agree or disagree with the value determined by the appraiser.

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