Common FHA issues and how to solve them

There are some common FHA issues that you can pay attention so that your homebuying process will be as smooth as possible.

Some of the benefit of FHA loans include smaller down payment, flexible guidelines, and low credit score requirements. Perfect for first-time homebuyers who are looking to own their first dream home!

However, before you can qualify for the loan, you first have to conduct an appraisal and inspection on the property. This procedure is what determines the value of the home and ensures that it is up to the FHA health and safety code.

To speed up the whole application and appraisal process, you can try to minimize some common issues that often happen.

FHA Loan Definition

First off, what is an FHA loan? It is a popular type of mortgage that is supported by the government agency, the Federal Housing Administration (FHA). Compared to other mortgage programs, FHA loans often have a low minimum credit score and down payment requirement, making it an ideal option for first-time homebuyers and those in the low to moderate income bracket.

Top 8 FHA Appraisal and Repair Issues

Paint

Perhaps the single-most common issue found during home appraisals is defective paint surface. FHA entails any imperfection to be fixed, which includes but is not limited to chipping, flaking, and peeling paint in the interior and exterior of the house. This is an especially typical problem found in houses from 1978 or earlier, due to the lead-based paint they usually use. To fix this, simply repaint the surfaces or remove all the existing paint.

Utilities

Utilities such as lights and plumbing must not only be operable; they should also be turned on so that the appraiser can inspect them. These are most commonly found in vacant properties or homes that are being short sold. If any of the utilities are broken, then you need to get it repaired or replaced before the re-inspection.

Windows

While small cracks may not be a problem for FHA appraisals, it’s important to fix and big cracks and shards. This is because broken windows are a possible cause for future harm and safety issues. Bedroom windows are best not barred, or if they are, then there should be a security release latch.

Exposed Wiring

Exposed wires can be potential danger when you live in the house, which means that they have to be resolved before the appraiser can approve of the property. All you need to do is hire an electrician to fix or replace the wiring.

Handrails

For homes with a lower-level entrances or more than one floor, make sure that there are handrails on the stairwell. HUD requires these as a safety standard, so installing them before an appraisal can help speed up the approval.

Plumbing & Heating Systems

Next, FHA requires all plumbing, electric, and heating and cooling systems to be operable. If any of them are broken, see to it that they are repaired before your appraisal date!

Health and Safety Hazards

It is also worth checking for any potential health and safety hazards. For example, electrical garage doors that can’t reverse and burglar bars.

Appliances

Last but not least, appraisers will look at missing appliances, which means there should be an appliance if there’s the space for it. So, if there is a space for a dishwasher in the kitchen, make sure there is actually a dishwasher there!

How long is an FHA appraisal valid?

FHA appraisals are typically valid for 120 days, although it’s possible to extend them in some circumstances.

How much do FHA appraisals cost?

The cost for an FHA home appraisal is covered by the borrower, while the amount can vary depending on various factors. From the size of the property to location and demand levels, each situation is different. One thing to note is that FHA appraisals can be pricier than those for a conventional loan. This is because there are lots of FHA requirements and standards to be ensured.

With that said, the average appraisal cost for FHA homes is between $600 and $2,000. This is usually paid for as part of the closing fees. If the appraised value comes back at or exceeding the expected number, you can continue with your transaction!

Summary

In general, the appraisal step of your FHA loan application and qualification process should not be a stressful or intimidating thing. This is an essential process that protects both the lender and you, as the borrower and future homeowner. As long as you comply to the regulations and take care to avoid these issues, it should go by with a breeze.

Now that the property has been appraised, you will know its market value and can move on with your mortgage application. We hope this article has been useful for your appraisal!