FHA Standards for Appraisal
- The FHA is a federal agency that provides mortgage insurance for single-family homes, apartment buildings, manufactured homes and hospitals. FHA insurance makes it possible for individuals who don't have a lot of cash reserves, or may not meet the income requirements for standard mortgages, to buy a home.
- A real estate appraiser is a professional who, after completing an extensive evaluation, estimates the value of real estate. The evaluation typically includes a consideration of the neighborhood in which a property is located, the sales price of similar buildings in the area, environmental factors, the condition of the property, and any potential income that could be derived from the property. Real estate appraisers are licensed by the states in which they practice.
- A home buyer who wants to qualify for FHA mortgage insurance must have any home that he wishes to purchase appraised by a real estate appraiser who is listed on the FHA's appraiser roster. To qualify for the appraiser roster, an appraiser must meet certain experience and education requirements to qualify as a certified appraiser in their state. The appraiser must also not be disallowed from working with the FHA or the federal government due to failure to uphold standards in the past, financial obligations or other disqualifying matters.
- The guidelines for property appraisal when the potential buyers want FHA mortgage insurance is different than a standard appraisal. In an FHA appraisal, there is a greater emphasis on the safety and habitability of the property. While properties do not have to be in perfect condition, if there are major health hazards in the home (such as peeling lead paint), these problems will have to be corrected before FHA mortgage insurance can be issued.
- In 2010, new FHA guidelines went into effect that regulate the relationship between appraisers and mortgage lenders. According to these guidelines, lenders can no longer hire appraisers directly, and lenders must be able to verify that the appraiser who signs the appraisal report is actually the same appraiser who performed the appraisal. Guidelines also mandate disclosure of appraiser fees and mandate that such fees are "reasonable and customary."
Federal Housing Administration
Real Estate Appraisers
FHA Appraisal Roster
FHA Appraisal Guidelines
Appraiser Independence
Source...