Can Your Home Pass an FHA Appraisal?

Nervous about the appraisal for that FHA loan? An FHA appraisal requires some very specific things to go smoothly. A wise homeowner knows what to expect and prepares to meet all of the requirements.

First, you should know that there are two chief concerns on the bank’s checklist when looking to approve an FHA loan:

1. The home’s safety
2. The functionality of household systems

You need to be certain that all the systems in your home are in working order, from light switches to toilets. There also cannot be any issues that impact the health or safety of its occupants. This means that if your upstairs’ closet light doesn’t work, wires are hanging, or your attic has a small spot of what looks like mold growing in one corner, there is going to be an issue.

The basic FHA appraiser checklist

Be prepared. If your house passes this list, you are probably in good shape for the appraisal:

• Working smoke detectors & carbon monoxide detectors are required if they are required by local code.
• The furnace (and AC if applicable) must be in working order.
• Appliances must all function properly.
• Utilities must be on so systems and appliances can be tested.
• The water heater must be in working order and strapped according to local code.
• There must be adequate water pressure for the house. The appraiser will flush toilets, turn on all faucets, and ensure that both hot and cold water are working.
• Toilets must flush and be mounted.
• Windows must open and close, and none can be broken.
• When viewing the attic, appraisers make sure there are vents, no damage, no mold, no exposed or frayed wires, and that sunlight is not beaming through. When inspecting the crawl space, appraisers make sure there are no signs of standing water or any other foundation support issues. Excessive clutter or debris in the attic or crawl space should be cleaned out.
• There should be proper drainage around the foundation.
• There should be no peeling or chipping paint, especially on homes built before 1978 because of the danger of lead-based paint (lead was in paint prior to 1978). There also must be no defective paint or bare wood on any properties built after 1978 because exposed wood impacts the longevity of the home. Chipping paint should be scraped and the wood re-painted (with no chips on the ground).
• Electrical outlets have a cover plate and work.
• Any active termite infestation needs to be cured.
• No loose or dangling wires anywhere in the home.
• The firewall from the garage to the house should be intact – no missing sheetrock, pet doors, lack of self-closing hinges, or hollow doors are allowed.
• The roof must be leak-free and must have two years of life remaining.

FHA appraisers do not deduct from the value of the home because your living room needs a fresh coat of paint. They look to ensure there are no issues with the structure or systems that threaten the health and safety of the owner or would impact the long-term value of the property. Forget worrying about how clean your closets are or cosmetic issues and focus instead on systems and structural factors.