So it is HUD that establishes all of the guidelines for the FHA loan program, and that includes requirements relating to the condition of the property. Most of the time, the lender will select an FHA-approved home appraiser without any input from the borrower, but this can vary. The appraiser will also evaluate the overall condition of the house to make sure it meets HUD guidelines and requirements. This recommendation is for good reason as a home inspection is a detailed evaluation of the property’s condition unlike an FHA appraisal, which only needs to determine if the minimum safety and health requirements of the HUD are met. Now that you know more about how an appraisal stacks up to a home inspection, I encourage you to get one done by an independent home inspection before you decide to close on a home. In an FHA loan, the seller may offer to pay closing costs – including appraisal, credit report or title expenses – for the buyer in any amount. Now, what happens if the appraiser does the appraisal and finds issues with the home that violate the MPR? Making sure rooms have a suitable egress; Making sure stairs and stairways have handrails; Ensuring that the lot on which the property is built is sloped in a way to allow proper drainage of water; The heating and cooling systems are capable of providing enough heat/cold; Whether there is any lead-based paint in the home that may be chipping or peeling, etc. Buy was $80k sell was $145k (so not 100%). to ensure that the house meets all minimum property requirements. Per FHA guidelines the buyer can't pay for As most investors know about the FHA 90 day flip rule then you know about the 2nd appraisal stip as well. An FHA appraisal is different in the sense that beyond the goal of determining market value, it also needs to make sure that the property is safe for occupancy. According to URAR, the appraisal costs range between $300 and $500 and the Home Appraisal may not be required if you have applied for an FHA Streamline Refinance. In cases where the borrower is working with a second lender (having switched to the new lender from the original one) HUD 4000.1 states, “The second Mortgagee may not request the Appraiser to re-address the appraisal. None of the conventional sales have had two appraisals. Who pays for termite inspections in FHA loans may depend on the extent of any visible evidence of termite damage. The lender uses the appraisal report to determine how large of a mortgage to grant you. Certain mortgage lenders may offer to cover the costs of the appraisal as a way to attract customers and to incentivise them, but most times, the mortgage lender will ask the seller to support the costs of the appraisal. The FHA Appraisal To secure a mortgage, the property must meet FHA minimum standards and meet a fair market value. If the FHA appraiser discovers evidence of a termite infestation, the home must be professionally inspected in that case as well. FHA vs Conventional Loans – What are the Differences? Ultimately, it is up to the buyer to handle the costs associated with the FHA appraisal. The lender is now asking to change to a conventional loan - is a new appraisal necessary if all is … The undersigned first did a URAR appraisal for the lender. He will also look at comparable properties that have sold recently in the same area. A conventional loan appraisal is not interested in the condition of the property from a safety and health perspective, the reason for the appraisal is to determine the market value. FHA Appraisals And The New Lender. In most cases, even though the appraisal is for the benefit of the lender and the appraiser is selected by the lender, the fee is paid by the buyer. What factors impact the cost of an FHA Appraisal? Does the buyer always pay for it? 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