FHA Appraisal

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Does FHA Require the Air Conditioner to Work?

July 30, 2009 in FHA Appraisal | No comments

ac1Yes. If there is an air conditioner at the subject property, it must be in working order for HUD to guarantee the loan. What if the air conditioner was stolen (that happens quite a bit with bank-owned properties)? If there is clearly supposed to be an air conditioner at the house, then it must be installed and working. Often times the owner or bank will install a new one before the close of escrow to meet this requirement. The gist is that FHA does not require an air conditioner in a house, but if one is there (or should be there), then it must work properly. Does that make sense?

If you have any questions, let me know. I am an FHA approved appraiser in the Sacramento Region and I can be reached at 916-595-3735 or www.LundquistCompany.com.

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What does FHA say about water heaters?

July 9, 2009 in FHA Appraisal | No comments

water-heaterWhat does HUD say about water heaters? First and foremost, the water heater must work and must be able to do its job. This is not a revolutionary concept, but if there is no hot water coming out the faucet when there should be, then clearly there is an issue to be solved. Testing the water temperature and water pressure is something that appraisers do during an FHA property inspection. Secondly, if local code states that the water heater must be strapped, then HUD requires a strap. 

If you have any questions about FHA standards or FHA real estate appraisals in the Sacramento Region, give me a call at 916-595-3735 or shoot me an email at info@LundquistCompany.com.

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Does FHA Allow Bare Wood? – A Tidbit for FHA Appraisal Inspections in the Sacramento Area

July 8, 2009 in FHA Appraisal | 12 comments

Here is one quick tid-bit for FHA appraisal inspections:

Does FHA allow bare wood on the exterior of a house?  No. Regardless of the age of the house (pre-1978 or newer), wood must not be bare and exposed directly to the elements. This goes for both the house and any structure on the property (outbuilding, shed, barn…). 

Regarding required repairs, it is common for HUD to require repairs when there is bare wood, a defective paint surface (chipping, flaking, cracking or peeling paint) or evidence of active infestation by wood destroying insects. In these instances, the first step is to cure the defective paint surface or replace the damaged wood if applicable and make sure to properly seal the structure (sealant or paint). 

Please let me know if you have any questions. I am experienced with FHA appraisals and I am doing quite a few of them these days. Lenders, banks, loan officers, brokers and home owners can still choose their own appraiser for FHA deals and I would be very glad to be selected by you.

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Search Engine Answers from the Lundquist Appraisal Blog

July 6, 2009 in FHA Appraisal, Search Engine Question | No comments

It’s interesting to see how people find my website. I am able to see basic data every day for how readers get here. I only see the words people type in search engines – nothing more. I wanted to provide a bit more information for readers below from a few of the most recent search results:

“getting your house appraised for a loan”

Answer:  I don’t know exactly where you were going with this, but I’ll take a stab. For mostly any loan you will need a real estate appraisal (and therefore a real estate appraiser to inspect your property). Most of the time these days you will not be able to choose your own appraiser due to HVCC – see below (unless doing an FHA loan or a loan not affiliated with Fannie Mae). People ask me all the time what they should do to prepare for an appraiser to come to their home. Other than being greeted with fresh cookies, hot coffee and biscotti (just kidding), it’s not a bad idea to have your house semi-clean and make sure that the appraiser will have access to each room. If the appraiser cannot observe all rooms and spaces within the house and on the property, then there is a good chance the appraiser will have to come back for another inspection.

“date HVCC went into effect”

Answer:  May 1, 2009. To read more about HVCC, click HERE. “HVCC” stands for the “Home Valuation Code of Conduct” and there have been quite a few articles lately on the subject.

“FHA appraisal interior cracks”

Answer:  FHA appraisals are the rage in the marketplace right now. From a lending standpoint there are different guidelines for FHA loans as opposed to conventional loans geared toward Fannie Mae. This of course means that FHA qualified appraisers are mandated to follow certain standards set forth by HUD. Do interior cracks matter to HUD? Well, what do they look like? How big are they? Where do they come from? Could these cracks suggest a lack of structural integrity or are they simply evidence of an older house and/or depreciation? This is not an easy question to answer without observing the property personally. HUD is primarily concerned with safety, soundness and security, and so if there are any issues with the property that might compromise safety, soundness or security (or any of the very specific minimum requirements HUD has laid out), then the cracks could be something warranting further investigation. But then again, they could be no big deal at all.

“Rocklin Tax Assessor”

Answer:  People find this website on a daily basis by searching for items such as “Rocklin Tax Assessor,” “Rancho Cordova property taxes”, “Fair Oaks taxes” and more. Keep in mind that our local cities do not collect property taxes from us. The county in which the property is located handles property tax assessment and collection. In the case of Rocklin, that would be the Placer County Assessor. If you do happen to need help disputing your property taxes, you are invited to poke around our property tax appeal website HERE.

I hope these brief answers were helpful. I’ll continue to answer questions I find from search engine results, but I am more than happy to answer questions via email or phone too.

http://www.lundquistcompany.com/blog  Search Engine Answers from the Lundquist Appraisal Blog

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Answers to Questions from Search Engine Inquiries Yesterday on the Lundquist Appraisal Blog

July 2, 2009 in FHA Appraisal, Question from Search Engine | No comments

I am making it a habit to answer some of the questions that people are asking on search engines to find this site. The following was typed in yesterday: 

“Is a dishwasher required by FHA”

Great question. The answer is “yes” or “no” depending upon the situation. If the kitchen does not have a place for a drop-in dishwasher, then HUD does not require one to be present. However, if there is an alloted space for a dishwasher in the kitchen cabinetry, then there must be a working dishwasher present. 

“Intended user on an estate settlement real”

I have to go out on a limb here to fill in the blanks. My guess is that you were looking to find out who the intended user is on a real estate appraisal for an estate settlement. The answer is simple. The intended user is whoever the client and appraiser decide it to be when the appraiser takes on the assignment. When an estate settlement appraisal is ordered, figuring out who the intended user is and what the intended use will be are some of the very first items discussed and clarified between the appraiser and client. It is most typical during estate settlement to have the intended user be the home owner or heir as well as a specified CPA or attorney.

“Date of death appraisal”

A “Date of Death” appraisal is usually a retrospective valuation based on the date a certain person passed away. It is very common for home owners or heirs to need appraisals like this for inheritance or estate settlement purposes. Usually an attorney or CPA directs a home owner to hire an appraiser during situations as such. You can read more on a previous post HERE.

“HVCC loan officers can choose appraiser”

On May 1, 2009 something called the Home Valuation Code of Conduct (HVCC) came into effect. HVCC basically means that loan officers and brokers cannot order appraisals directly from appraisers any longer when a conventional loan directed toward Fannie Mae is at hand. However, loan officers and brokers CAN order FHA appraisals directly from appraisers. Anyone doing an FHA loan can choose the appraiser they work with. Why is this? Because HVCC relates to loans that are geared toward Fannie Mae, and HUD is a separate entity from Fannie Mae. I wrote more about this subject HERE and HERE.

“Water park stone creek rancho”

I don’t have photos of the spray park at Stone Creek Park, but I highly recommend this family-friendly park in Rancho Cordova off of Zinfandel & Spoto. See www.crpd.comfor details on local parks in Rancho Cordova.

I hope this was helpful. Please let me know if you have a need for clarification or any further questions.

http://www.lundquistcompany.com/blog  Answers to Questions from Search Engine Inquiries Yesterday on the Lundquist Appraisal Blog

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What are FHA Guidelines for Removing Lead-Base Paint? (question from search engine)

June 26, 2009 in FHA Appraisal, Search Engine Question | No comments

Website statistics show that someone found this site today when searching for the answer to the following question: What are FHA guidelines for removing lead-base paint? I’d like to shed some light on the answer and hopefully help any future readers too.

chipping-paintJPGAs indicated on the HUD website in tremendous detail, whether you are in Sacramento or anywhere in the United States, there is a very specific methodology for the abatement of lead-base paint. To learn more than you probably ever wanted to know about lead-base paint removal, you can DOWNLOAD a PDF document from HUD (50+ pages). In short though, the answer to the question is that a defective paint surface (chipping, cracking, flaking, peeling) on a property built prior to 1978 must be cured by a proper method of scraping and then painting afterward. Careful attention must also be given to flakes of paint falling on the soil during removal. Thus you can see that it doesn’t jive well with HUD to simply slop on some new paint over a cracked or flaking surface and then call it cured. The defective portion of paint actually has to be properly removed and then the bare wood must be painted. Does that make sense?

Why do you think they HUD is so concerned about lead-base paint anyway?   

If you have any questions, feel free to contact me at 916-595-3735 or www.lundquistcompany.com or LundquistCompany@gmail.com

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What types of repairs does HUD require for an FHA loan in the Sacramento Area?

June 25, 2009 in FHA Appraisal | No comments

images1I find myself doing quite a few FHA appraisals these days in light of the enormous popularity of FHA loans in the Greater Sacramento Region. Sometimes properties are able to easily meet FHA minimum standards, but other times houses might need just a little work (or quite a bit) to bring them up to the level required by HUD.

The primary concern of HUD as it pertains to a property is with safety, soundness and security. The basic gist is that for HUD to guarentee a loan, a property must not have any issues that present a threat to safety, security or soundness.  Minor cosmetic issues don’t fall under this category, so a crack in a window or a stain on carpet or a missing doorknob are not a big deal for FHA loans (so long as there is no threat to safety, security or soundness). Other condition issues though such as peeling or chipping paint, an inoperable heating system or a leaking roof are a big deal to HUD because they do impact safety, security or soundness.

At times it is easy to think that appraisers are being knit-picky over minor issues that could easily be overlooked while inspecting a property, but take a look firsthand what FHA requires for repairs (click HERE).

If you ever have questions about FHA-related required repairs or FHA real estate appraisals in the Sacramento Area (multiple counties surrounding Sacramento), you are welcome to contact me at 916-595-3735 or www.lundquistcompany.com or LundquistCompany@gmail.com  Lastly, you may find HUD to be very helpful when you call (800)CALL-FHA.

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What does it take for a Sacramento area property to meet minimum FHA requirements?

June 13, 2009 in FHA Appraisal | No comments

hudWhat does it take for a property to meet minimum FHA requirements? This is a very important question because FHA loans have become extremely popular in the Greater Sacramento Region, especially among first-time buyers.

FHA is primarily concerned that everything in a house functions properly and that there are no health and safety issues. As an FHA approved real estate appraiser, the inspections I do are based upon guidelines from the United States Department of Housing & Urban Development (HUD). Here is a sample of some of the things I look for while on an inspection:

  • Appliances must be in functional use. If there is a hood, it must work. If there is a dishwasher it must work. If there is a stove, it must work…
  • The heating unit must be in working order (and AC if applicable)
  • Paint must not be chipping, peeling, or flaking on homes built before 1978. There must be no defective paint or exposed wood for properties built after 1978. If there is an issue with paint, it needs to be cured properly by actually scraping the paint instead of just painting over with new paint.
  • The water pressure must be adequate for the house. Appraisers flush toilets, turn on all faucets and ensure that both hot and cold water are working.
  • The water heater must be in working order.
  • The attic must be inspected and we make sure that there are vents, no evidence of a previous fire, no exposed or frayed wires, and that sunlight is not beaming through.
  • Attics and crawlspaces are to be viewed at least with head and shoulders into them (if present)
  • The crawl space must be inspected and we make sure there is not excessive debris or signs of standing water or any other foundation support issues.
  • Electrical outlets must work.
  • Toilets must flush and be mounted
  • No leaks in the roof.
  • The carpet does not have to be perfect (stains or minor tears okay). If there is a health or safety issue with the flooring, then that is a red flag. 
  • A house does not need new interior paint.
  • Windows cannot be broken. Cracks can be okay so long as there is not an issue with safety, soundness and security.
  • No dangling wires from missing fixtures.
  • Water heaters must be properly attached with straps (local code says that water heaters need to be strapped and FHA requires water heaters to meet code).
  • Stoves are not required unless they are drop in stoves.
  • FHA doesn’t require air conditioning, insulation, smoke detectors or the like, but if they are there they must work as they were intended.

Please let me know if you have any questions. I am glad to help buyers, agents, brokers and anyone else know more about FHA standards and the appraisal process. The great thing about FHA loans too is that the buyer, agent or broker can readily choose whatever appraiser he/she wants because HUD is not bound by HVCC (this is a new law that basically means that brokers and loan officers cannot directly order appraisals from real estate appraisers when the loan is geared toward Fannie Mae). You are welcome to contact me (Ryan) at 916-595-3735 or LundquistCompany@gmail.com

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FHA Appraisal Inspections in the Sacramento Area

February 27, 2009 in FHA Appraisal | No comments

FHA loans are the hot ticket in town these days, aren’t they? If you are involved in loans in the Sacramento Region, you probably find yourself doing quite a few FHA transactions these days in comparison to the past couple of years (I am certainly doing more FHA appraisals).

Since people sometimes ask me how an FHA appraisal inspection differs from a non-FHA appraisal assignment, I wanted to include a few differences below.  A non-FHA assignment could include some or all of the following, but an FHA inspection MUST include the following and more per strict HUD guidelines:   

  • Test appliances to ensure in working order
  • Test AC and Heat system
  • Observe if paint is chipping, peeling, or flaking
  • Test water (pressure, heat, smell, taste…)
  • Observe the attic
  • Observe the crawl space
  • Check all electrical switches to ensure lights come on
  • Check outlets to ensure they work
  • Flush all toilets and run water in all sinks
  • Take angled photos of the subject property
  • And more….

If anyone has questions on FHA appraisals within the Greater Sacramento Region, give me a call at 916-595-3735 or see www.lundquistcompany.com

http://www.lundquistcompany.com/blog FHA Appraisal Inspections in the Sacramento Area

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