FHA Appraisal Conditions, Idiotic?

July 31st, 2010

Appraisers are held to a higher standard of property condition on FHA appraisals. I regularly get some of the most…I’ll say “interesting” appraisal conditions on an FHA loan. It is as if FHA and the appraisers think that a broken step or an unpainted piece of trim are either a great danger to society, or are going to drastically inhibit the value of the house. So of course, FHA seems to require its appraisers to use a more stringent analysis, and hence they end up asking for lots of “interesting” repairs to be done to the home.

Below is a very recent example of an FHA appraisal, and what the appraiser wanted to be repaired:

“install a quick release lever on rear security door”

“garage door did not open so repair accordingly”

“qualified/licensed contractor to determine source of water on garage floor, repair as needed”

“paint the exposed wood on front door”

“repair the broken step leading to the rear yard”

Interesting? Idiotic? Necessary?

How we define them does not matter, the reality is the repairs must be done. But anyone using FHA financing as a buyer should know that this sort of thing is why FHA financing is frowned upon by sellers in many markets. And any Realtor representing a seller who is considering an offer where the buyer is using FHA financing, don’t shy away from the offer, but be aware of what may be required after the results of the appraisal are in!

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.​

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