FHA requirements for appraisals

The FHA has certain minimum requirements that a home must meet before it will issue a
guarantee on the property. Because homes, conditions, environments, etc are so varied,
it is not possible to nail down a single set of standards that applies to all situations and all

First, there is an important distinction between an appraisal and an inspection. An
appraisal is required by the lender to make sure the home is a good investment. This
does not guarantee the home is in good condition nor should it be assumed that no repairs
are needed simply because it passed an FHA appraisal. A passing appraisal is definitely
a good sign, but you should have an inspection done to determine what if any changes
should be made to the property. Your personal requirements may not be the same as your
lenders requirements.

There are several conditions that should be taken care of before an FHA appraisal is
scheduled. The appraisal will evaluate the homes potential value, the soundness of the
plumbing, electrical system etc. If there are known issues that will need to be addressed
it is best to take care of the first to avoid a second appraisal being required to ensure the
work was completed correctly.

Just a few of the most common repairs needed are:

  • Any faulty wiring will need to be brought up to standard.
  • Cracks in the foundation will need to be repaired.
  • There can be no chipped or peeling paint.
  • Caulk around all the windows and make sure they all open/close correctly.

An FHA approved inspector will have to do the appraisal. Not all appraisers are
certified to do FHA appraisals. You can use the search tool here to look up an approved
appraiser in your area: http://www.forfha.com/appraisers

If you will be scheduling an appraiser, there are some important things you will want to
know before making your selection. Their experience in the field, how much they charge
and how long will it take for them to get the results back to you are just a few of the
questions you will want answered.

The cost of an appraisal varies by area but they generally range from $300 to $500.
In most cases, an appraiser will take under an hour to perform his inspection and will
take two or three days to process the information and prepare the appraisal report.

The FHA is part of the Department of Housing and Urban Development. There is
extensive information on HUD’s website about conditions and property requirements
that you may find useful. Here is a link to FHA’s minimum property standards: http://

Don’t forget, an appraisal is required for the sale and refinance of a property and is
primarily done to protect the banks investment in the property. An inspection is a separate and distinct review of the property done for your personal best interests. If you are buying a property, have an inspection done to make sure the property meets your
personal requirements and is satisfactory to you. If you are selling your home and need
an FHA appraisal done, the link and information above will help make sure all goes smoothly for you.

This entry was posted in FHA Requirements, Homebuyers. Bookmark the permalink.

2 Responses to FHA requirements for appraisals

  1. Laura RUether says:

    I noticed FHA has a list of approved FHA Home Inspectors. What is required to be a “approved” FHA Home Inspector? Who would require a Home Inspector to be on this list before using that inspector?

  2. Anne Rademacher says:

    How does one (real estate brokers, lender, buyer) file a complaint on an appraiser who made numerous errors and would not correct or adjust when the “contested” appraisal request was justified…

Leave a Reply

Your email address will not be published. Required fields are marked *