FHA appraisers in Charlotte, North Carolina describe some of the changes to FHA appraisals

FHA appraisers in Charlotte, North Carolina describe some of the changes to FHA appraisals.


Many FHA appraisal requirements have changed in the past couple of years, and many real estate agents, and property appraisers are unawhare of these changes. The following are some of the new requirements from HUD/FHA and are from the Mortgagee Letter 48-05.


In September 2005, the Federal Housing Administration (FHA) issued Mortgagee Letter 2005-34, which announced the adoption of four of Fannie Mae’s revised appraisal reporting forms as well as the release of Revised Appendix D of Handbook 4150.2, CHG-1. This Mortgagee Letter provides additional guidance regarding FHA’s repair and inspection requirements for existing properties and the use of the Fannie Mae appraisal reporting forms. All appraisal guidance for new construction that serves as security for FHA-insured mortgages remains unchanged beyond the clarification in the Revised Appendix D that the appraiser may appraise a home that is under construction and that is 90% or more complete without benefit of plans and specifications.


In a continuing effort to reform and standardize its appraisal requirements, FHA has shifted from its historical emphasis on the repair of minor property deficiencies and now only requires repairs for those property conditions that rise above the level of cosmetic defects, minor defects or normal wear and tear. FHA Roster Appraisers are reminded to report all readily observable property deficiencies, as well as any adverse conditions discovered performing the research involved in completing the appraisal, within the appraisal reporting form. Lenders should use professional judgment and rely upon prudent underwriting practices in determining when a property condition poses a threat to the safety of an occupant and/or jeopardizes the soundness and structural integrity of the property, such that additional inspections and/or repairs are necessary.



Repair Requirements



As stated in Revised Appendix D, FHA now permits an “as-is” appraisal for existing properties that serve as security for FHA-insured mortgages when minor property deficiencies, which generally result from deferred maintenance and normal wear and tear, do not affect the safety of the occupants or the security and soundness of the property. FHA no longer requires repairs for these types of minor cosmetic deficiencies to bring a property into compliance with FHA Minimum Property Requirements. Specifically, the guidance provided in Handbook 4150.2, CHG-1, Chapter 3, Paragraph 3-6, A-7 referencing all-weather road surfaces; Paragraph 3-6, A-8 referencing poor workmanship; Paragraph 3-6, A-11 referencing debris and trash in crawl space; Paragraph 3-6, A-16 referencing steps without a handrail; Paragraph 3-6, C referencing bare floors, badly soiled carpeting and cracked plaster and sheetrock is no longer applicable. Additionally, the guidance provided in Handbook 4905.1, REV-1, Chapter 2, Paragraph 2-7, A-2 referencing all weather road surfaces; Paragraph 2-8 referencing poor workmanship and Paragraph 2-14, C referencing crawl spaces with debris and trash is no longer applicable. Any reference to the Valuation Condition form (form HUD-92564-VC) and protocol for its completion contained in Handbook 4150.2 is no longer applicable as well. Examples of minor property conditions that no longer require automatic repair for existing properties include, but are not limited to:



· 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, sheetrock 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

If you need a home appraisal give Valuation Experts a call. We are FHA approved with the Department of Housing and Urban Development. www.valuation-expert.com

Our real estate FHA appraisers cover Mecklenburg County North Carolina, Union County North Carolina, Iredell County North Carolina, and Cabarrus County, North Carolina. Valuation Experts also offers appraisals in Charlotte NC, Pineville NC, Mint Hill NC, Indian Trail NC, Waxhaw NC, Monroe NC, Weddington NC, Matthews NC, Stallings NC, Marvin NC, Wesley Chapel NC, Huntersville NC, Davidson NC, Harrisburg NC, Mooresville NC, and Concord North Carolina.
www.charlotte-appraiser.net

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