Common Work Orders for FHA Appraisals
A number of you have asked for some information about FHA appraisals guidelines. Please read below for some detail. Hope this helps!
Roofs and Attics
FHA guidelines need roofs to have at least a remaining useful life of two years. If this requirement cannot be met, the appraisers are responsible for requiring the roof to be repaired or re-roofed. No more than three layers of roofing are permitted. If there are more than two layers of existing roofing, and repair work is required, 100 percent of the old roofing must be removed. If the property is four units or less, is part of an association and has its own roof, the roof must be inspected. In most cases attics are to be inspected for signs of leakage, structural deficiencies, holes or other problems.
Kitchens and Baths
The FHA appraisal guidelines for appraisers regarding kitchens and bathrooms are very basic. Besides having an adequate and acceptable source of water and fixtures, the requirements include checking that the toilet functions properly and is free of leaks. The appraiser must also examine fixtures and check for structural damage and standing water, must inspect sewer or septic systems, look for leaking or badly corroded water lines and check for low water pressure.
Basements and Crawl Spaces
FHA appraisers must evaluate basements for signs of water, dampness or structural problems. Under guidelines current as of 2009, sump pumps are allowed as long as they work properly. The pump’s power supply may consist of a factory electrical cord connected to the proper electrical receptacle or hard-wired according to acceptable wiring standards. Properties that have accessible crawl spaces must be inspected if there is enough space for at least the appraiser’s head and shoulders to enter the area. The appraiser should look for evidence of wetness and standing water.
Electrical panels can consist of circuit breakers or fuses. The minimum amount of power required is 60-amps. This is only acceptable as long as it seems adequate for standard appliances. Knob and tube electrical wiring is permitted with 60-amp service. Homes operating primarily on electricity, especially with electric heat, should have 200-amps. Under FHA appraisal guidelines for appraisers, they must look for damage receptacles, missing cover plates and worn and exposed wires.
All “habitable” rooms must have a source of heating. Although the heating equipment is not required to be located in the room, each room has to receive sufficient heat. If the primary heating unit cannot be extended into a room, a properly wired baseboard unit, powered by electricity and controlled by a thermostat, is accepted under the guidelines. Adequate heat is defined as a minimum of 50 degrees Fahrenheit in areas used for living and where plumbing systems are located. The occupants must be able to control the main heating by thermostat. Electric heat systems must have adequate electric service as require by local codes. Floor heaters, wall heaters, solar systems and wood stoves are allowed.
Some other FHA appraisal guidelines for appraisers pertain to requirements on items such as hot water heaters, pest control, flood control and zoning. There are also certain conditions regarding environmental hazard that FHA appraisers must be cognizant of, including the following: asbestos, mole, radon, lead paint and excessive noise. Underground storage tanks and overhead high voltage transmissions lines and towers are also areas of concern.
Safety – FHA underwriting guidelines require that lenders review the appraisal to see if the appraiser has made note of property conditions that will affect the health and safety of the occupants.
Soundness – FHA underwriting guidelines require that lenders review the appraisal to see if the appraiser has made note of property conditions that jeopardize the soundness and structural integrity of the property. When an FHA appraisal is done on a home, they are looking to make sure that their aren’t any safety hazards and that the house is structurally sound.
In Mortgagee Letter 05-48, FHA provides the following examples of minor property conditions that do not require automatic repair for existing properties:
- Missing handrails
- Cracked or damaged exit doors that are otherwise operable
- Cracked window glass
- Defective paint surfaces in homes constructed post 1978
- Minor plumbing leaks (such as leaky faucets)
- Defective floor finish or covering (worn through the finish, badly soiled carpeting)
- Evidence of previous (non-active) Wood Destroying Insect/Organism damage where there is no evidence of unrepaired structural damage
- Rotten or worn out counter tops
- Damaged plaster, sheet rock or other wall and ceiling materials in homes constructed post- 1978
- Poor workmanship
- Trip hazards (cracked or partially heaving sidewalks, poorly installed carpeting)
- Crawl space with debris and trash
- Lack of an all weather driveway surface
FHA also provided the following list of conditions that will require automatic repair for existing properties:
- Inadequate access/egress from bedrooms to exterior of home
- Leaking or worn out roofs from lack of maintenance or hail damage (if 3 or more layers of shingles on leaking or worn out roof, all existing shingles must be removed before a new roof is added)
- Evidence of structural problems (such as foundation damage caused by excessive settlement)
- Defective paint surfaces in homes constructed pre-1978
- Defective exterior paint surfaces in home constructed post-1978 where the finish is otherwise unprotected.
These lists are not meant to be all inclusive, but they give clear guidance on the issues that are and are not a concern to FHA
Charles Dailey – Branch Manager, Loan Officer, Certified Military Housing Specialist – CA DOC, MN DOC & WI DFI
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