Step on a crack, break the FHA Appraisers back.

The FHA appraisal reality.

There’s an old example in the mortgage industry that a crack in the sidewalk can ruin an FHA loan.  That’s not true, but to be honest if you’ve done this long enough to have heard that…you may not need to read this update.

Since many of you are starting to experience FHA for the first time, I am hearing a lot of apprehension about your FHA buyers and bidders.  Let’s take a quick look at a few myths and realities that affect you...

Myth: An FHA appraisal is a combination value report and home inspection.

Reality: In addition to a value judgment the appraiser is required to do certain “condition checks” on the property, but it’s far from a home inspection.  The appraiser is simply asked to detail any visible issues that may affect the livability of that property.  There is a long list of what they check for, but you’ve all asked me to keep these brief, if you want the list shoot me an email and I will reply with it.

Myth: Any issue noted on the appraisal will disqualify a home from being financed through FHA.

Reality: Not at all!  Since the appraiser is only providing detail on obvious (visible) items, the property flaws are generally fixable with very little work.  Once the appraisal is received, contact the lender and go over any adjustments that need to be made, they will then ask the appraiser to go back to the property to verify the work has been completed.

Big Reality: The current marketplace doesn’t allow home sellers to eliminate ANY buyers.  Keep in mind that FHA loans can be done with very little/no money down, still have very low fico score requirements, and have no adjustments for “soft market” areas.

--Keith

http://www.eaglenationwide.com

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