fha 203k loan consultant

fha 203k loan consultant

fha 203k loan consultant

What is an FHA appraisal?

The FHA appraisal process is unique in that the appraiser basically performs double-duty as both an appraiser and an inspector. If you’re using an FHA loan to buy a home, the property must go through an FHA appraisal.

This is not an inspection, but the appraiser will check that the house meets certain safety standards in addition to determining the property value.

When you use a Conventional loan to buy a house, your appraiser is mainly concerned about the current market value of the property.

But when you use a federally-insured FHA loan, the appraiser has two objectives: Determine the house’s value, and inspect it to make sure it meets minimum standards for health and safety set by the Department of Housing and Urban Development (HUD).

The real difference between the two is the level of inspection that HUD requires in order to fund the loan.

If the FHA appraiser flags certain issues—peeling paint, loose handrails, or other safety issues—the loan is put on “hold” until they’re fixed. That’s not the case with a regular appraisal used for a Conventional home loan.

The Streamline 203k can help the house you want to pass the HUD inspection required for FHA loans.

The following list is a general idea of HUD requirements a home inspection may uncover.

While each item may seem fairly small, adding them up will tally up quite a bill.

Paying for them by financing the purchase with an FHA 203k Streamline will help spread the cost of it all over the life of the mortgage loan.

FHA Home Inspection Checklist

During an FHA home inspection, the appraiser will inspect and note major safety concerns. Here is a checklist of common items an FHA appraiser looks for:

General Health and Safety

  • Foundation or structural defects
  • Whether the utilities (water, sewage, heat, and electricity) all work
  • Chipped or peeling paint in homes built before 1978
  • Incomplete renovations
  • Water damage
  • If the property is accessible to vehicles, especially emergency vehicles
  • Exposed wiring and uncovered junction boxes
  • Whether the house is too close to outside hazards, such as a leaking oil tank or a waste dump
  • Excessive noise, such as being close to an airport
  • Missing handrails

Exterior

  • Leaky or defective roof and holes in the siding
  • Leaning or broken fencing
  • Doors that don’t properly open or close
  • Condition of gutters, chimney, stairs, railings, and porches
  • If swimming pools are up to code

Every Room

  • Whether each room has electricity
  • Whether each room has a window or door to the exterior to be used as a fire escape

Kitchen

  • Missing or broken appliances usually sold with a home, including stove and refrigerator
  • Broken or leaking sink

Bathrooms

  • Broken or leaking toilet, sink, or tub/shower
  • No ventilation (either an exhaust fan or window)

Crawl space or basement

  • Basement moisture
  • Evidence of past or present standing water

Heating and Plumbing

  • Inoperable HVAC
  • Major plumbing issues and leaks

These are some of the common items an FHA appraiser looks for, but other issues that might make a house unsafe could keep it from passing

 

With the FHA 203k, you have 2 choices. You can utilize the Full 203k or the 203k Streamline.

Full 203k covers projects which total more than $35,000 or structural repairs.

It also requires a HUD consultant.

The Streamline 203k doesn’t require a consultant (although working with an experienced professional is generally a good move) and it does not cover structural repairs.

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