I recently read a refreshing article about how FHA appraisal guidelines are not as strict as they used to be. I am hoping the appraisers will start taking this to heart because I have had some crazy requirements with FHA Appraisals ( carpet needing to be cleaned and the grass to be mowed seem to come to mind).
Steve Lines with Academy Mortgage writes in the Arizona Journal of Real Estate & Business about the requirements. Basically he states that FHA permits an "AS IS" appraisal for FHA loans for property's that have problems that have occurred from lack of maintenence or normal wear and tear. These guidelines have been in place since January 2006, but I haven't run into an appraiser who has done it that way yet.
FHA does state what is a Definite Repair Needed:
Inadequate access from bedrooms to exterior of home.
Leaking Roofs
Structural Problems (foundation, trusses, beams etc)
Defective Paint if constructed before 1978
Defective exterior Paint constructed after 1978 if finish is not protected
Other than those most other items can pass an FHA Appraisal. Good to know if you didn't already know this! The majority of loans I have done in the last 2 years are FHA, so I am always looking for more information so I can know what to expect for my buyers.
Betsie Melter, REALTOR, GRI, ABR
Realty ONE Group
4677 S. Lakeshore Dr. Tempe, AZ 85282
480.734.3644
realtorbetsie@gmail.com
I have found if the front steps leading up to the house are in disrepair it almost always means an inspection failure. Also had one fail because the drive left no room to turn around.
Typically, anything affecting safety, security, or saleability must be addressed. The changes were addressed in mortgagee letter 2005 ML-48. Gone are the days of properties failing FHA because of torn wallpaper or other minor issues. Some of the most common issues requiring repair are:
Thanks for the clarification Rodney.