If you have decided to apply for an FHA loan to purchase a home, or if you are attempting to sell your home to someone with FHA financing, there are some special appraisal facts of which you should be aware. FHA stands for Federal Housing Administration and is an agency of the federal government. Therefore, the same rules apply around the country for any home bought using an FHA insured loan. These appraisal requirements are more stringent than those for conventional loans and may seem confusing to first-time buyers. OCappraisalpros are here to help you understand FHA appraisal requirements and ensure that your home complies with all federal regulations.
The Cardinal Rules for FHA Loans
There are a few things homeowners can do when their properties are being appraised by the FHA for sale. These include:
- Turn on utilities. Even if the house is empty, water, electricity and gas should be turned on in order to allow appraisers to test the home’s systems and appliances. Everything must function properly in order to get clearance from FHA. Ensure adequate drainage….there needs to be a proper perimeter around the house for drainage to prevent flooding in basements which can be a disqualifier of a home.
- Check heating and AC. Heating units are required to be in good working order, as are any wall or central air conditioning units.
- Be sure water is available. Appraisers check for both hot and cold running water as well as flush the toilets to be sure they are all working. Adequate water pressure must be present and all water fixtures must work properly as well as the water heater. The water heater must also be strapped according to local codes.
- Check attics and crawlspaces. Appraisers will look for vents in the attic to ensure adequate ventilation. There should be no exposed or frayed wires or visible sunlight. There should be no standing water in crawlspaces. It may speed the process to remove excessive debris from attics and crawlspaces.
- Lead-based paint should be covered or removed. Prior to 1978, lead-based paint was used in many homes. If this paint is chipping, peeling or flaking, it must be carefully removed and repainted with a safe emulsion.
- Cover electrical outlets. All electrical outlets must work and should have a cover plate.
- Get rid of termites. An active termite infestation must be treated and solved before the closing of escrow.
- Clean it up. There should be no dangling wires, broken windows, missing fixtures, missing sheet rock or trip hazards.
- Keep alarms working. All smoke detectors and carbon monoxide detectors required by local law must be in place and working.
Common cosmetic problems are not usually a problem as long as there are no health or safety issues associated with them. If there are health or safety hazards present, they must be resolved according to requirements and the appraiser will request another inspection to confirm.
If you have any questions about the appraisal process or need an appraisal on your property, Michael Gibson or Dave Rowan at OCappraisalpros can be contacted at 949 500 4496. Our website contains more information on OCappraisalpros can help!