What are Appraisers Looking For in
Current Chicagoland FHA Assignments?
FHA loans have been gaining a lot of attention as of late. As of April 1st, FHA annual mortgage insurance premiums rose on the majority of FHA loans by 0.1%, or 10 basis points.
Still, even with the rise in cost, FHA is a viable option for many potential Buyers to consider for mortgage financing. With that said, as with all financing options, the final choice (and wisdom) of mortgage program lies in the individual applicant's personal financials and credit ... and is something that needs to be thoroughly discussed and weighed by the applicant and their Mortgage Lender.
But once the decision to move ahead with FHA financing is made ... what then?
This has been of great interest to many of the agents I work with, along with their Buyers. Many questions arise, but frequently both want to know, "What it is that Appraisers are currently looking for on Chicagoland FHA assignments?"
The answer is: There is no punchlist or checklist for "do's" and "don'ts" regarding repairs or replacement of items within a property. The reports I see have become more representative of a common sense "judgment call" by the Appraiser assigned to the case.
I know that sounds much like a cop out and a non-answer. But the reality is that FHA's stance has evolved over the last few years and has migrated away from the nit picky minor repairs that Lenders and Agents in the Chicagoland region had become all too familiar with. That's not to say that a property's peeling or chipped paint won't need to be scraped or re-painted. Or that missing smoke detectors won't need to be installed. They still do and they will be asked for.
But the fact of the matter is, Appraiser's current requests are now based more upon safety, sanitary concerns, and soundness of the property. Unnecessary inspections are typically a thing of the past.
In my opinion, the attention and job of the Appraiser has shifted and is now once again focused on the Subject Property's value. (Rightfully so.) Home inspection issues are left to Home Inspectors. The appraising has returned to being a bigger assignment than just "looking for repair issues".
To help you better understand the focus of Appraisers during FHA assignments, I have attached a link to the more pertinent pages of the nearly 150 pages of reference on this topic found in HUD Guidelines. I believe this information can be of real value and help to Realtors when representing their Sellers and Buyers ... and in communicating with Appraisers and Mortgage Lenders.
I hope that this information, list of considered repairs, and checklist of property requirements proves helpful. As always, should you have questions ... please contact me with your questions or for clarification.
* Wondering if a FHA mortgage is an option for you when Buying or Refinancing a home in New Lenox, Will/DuPage County, or elsewhere in the Chicagoland area? Let's talk! Contact me today ... we'll put my 36+ years of mortgage expertise and experience hard to work on your behalf ... and discover the best financing options for you now and in the future.
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