At Transcend Appraisals, our certified residential appraisers are approved to perform appraisals for FHA-insured loans. We are knowledgeable about applicable Federal Housing Administration (FHA) and U.S. Department of Housing and Urban Development (HUD) requirements and follow the applicable FHA appraisal guidelines and procedures when completing FHA residential appraisals.

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An FHA appraisal provides the lender with an independent opinion of the property's market value and an assessment of whether the property meets applicable FHA property eligibility and minimum property requirements for an FHA-insured mortgage. The appraiser's observations and reporting help the lender determine whether the property provides acceptable collateral for FHA mortgage insurance purposes.

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What Makes an FHA Appraisal Different?

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The FHA appraisal process has traditionally asked more of the appraiser than is asked in the completion of an inspection for a conventional appraisal. One of the major differences between a regular inspection and an FHA inspection is that a property inspection will involve an in-depth visual inspection of all areas of the subject property including the attic. It is always advisable for the lender to inform the homeowner of this requirement. The appraiser MUST inspect the attic even if access is available only through a scuttle. In addition, another major difference from a conventional loan appraisal is that in the performance of an FHA appraisal the appraiser MUST report any deficiencies noted during the inspection. Required FHA repairs (deficiencies) are those that impact the Safety of the occupants; the Security of the property or the Soundness of the structure. In cases where such items are identified, it is the appraiser’s responsibility to make the value opinion of the property “subject to” the repair of the item. Such appraisals that mandate a repair item will then require a compliance inspection to ensure the deficiency has been corrected. While potential repairs do cause a delay in the transaction they are essential to eliminate conditions that threaten the physical security of the property. FHA appraisals, however, are “no guarantee” that the property is free from defects. The appraisal only establishes the value of the property for mortgage insurance purposes. In fact, Buyers are generally encouraged to engage a qualified home inspector to obtain a more detailed physical (rather than visual) property inspection.

 

If you have questions about an FHA appraisal or need a qualified residential appraiser for an FHA-insured loan, please contact Transcend Appraisals by telephone or email. We are available to discuss your appraisal needs and provide professional assistance.