NJ First-Time Home Buyers

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FHA Loans Need Appraisals, Not Inspections

Helpful information regarding FHA, inspections, FHA appraisals, etc. I get asked this question all the time. This is a brief explanation of the difference between a FHA appraisal, a home inspection, and the "myth" of the standalone FHA inspector. Your Realtor should definitely know the difference as well.

I get a lot of questions about FHA Inspections, and it's about time I sat down and blogged about it.  Here are the most common questions I get asked about standard FHA loans.  This information does not apply to FHA 203(k) Loans.

Can You Do The FHA Inspection? FHA loans do not require a home inspection, they require an appraisal.  The appraiser does this.  These are often mistaken for an inspection.  Home inspections are still strongly encouraged.

How Can I Pass The FHA Inspection? First, see above.  FHA appraisals require the appraiser to look for obvious defects with the house, but the appraiser never requires repair of these items - the underwriter does.  Trying to figure out exactly what might require repair is a bit of a guessing game, and often has much more to do with the people doing the appraisal and the underwriting than it does the property itself.  Nevertheless, here is a partial list of some common defects that get flagged:

  • Chipping / Peeling / Flaking Paint
  • Rotting wood
  • Electrical outlets or switches that are defective
  • Plumbing leaks
  • Non-functional heating plant or AC
  • Roofs with less than two years of life left
  • Missing or badly damaged floor coverings
  • Obvious structural problems

Do I Need A Home Inspection If I'm Getting An FHA Inspection? Again, see above.  FHA appraisals are not home inspections, and it's unfortunate that they get confused as such.  The FHA appraisal has nothing to do with a home inspection.

Do I Need An FHA Certified Inspector If I'm Getting An FHA Loan? No.  The home inspection is completely independent of the FHA loan.

Reuben Saltzman, Structure Tech Home Inspections - Email - Minnesota Home Inspector

Comment balloon 4 commentsStephen Kappre • October 13 2009 12:45PM

Comments

Hi Steve: Good choice for a re blog.  I have often heard the consumer interchange those two terms by mistake.

:)

Posted by Matt Listro, Your Credit Repair Expert (National Credit Fixers - Matt Listro) almost 9 years ago

That sounds to me like the appraisers are partially doing the jobs of inspectors. I've never known an appraiser to look for those items.

Posted by Lisa Hill, Daytona Beach Real Estate (Florida Property Experts) almost 9 years ago

Matt - Yup

Lisa - Sort-of. On FHA absolutely. They don't go to the extent of course of a home inspector, but they check important stuff such as roof age, etc.

Posted by Stephen Kappre, Helping You Home (KW Hometown) almost 9 years ago

Thanks for re posting this!  I also have problems with clients saying they'll get a municipal inspection rather than spending the money on a qualified homes inspector.  The I spend quite a while explaining the difference!  Uh Oh, I feel a blog coming on!

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) almost 9 years ago

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