What Can Affect Your Home Loan Appraisal?
October 6, 2019
Did you know that when you apply for an FHA home loan, the house you want to buy with that loan must meet certain requirements as a condition of loan approval?
There are several areas that can affect whether your dream home is able to be purchased or not and your FHA appraiser is the one tasked with determining if the issues below will interfere with loan approval or not. This is not a complete list, but it’s a good indicator of what your loan officer requires to move forward with your loan in certain cases.
Encroachment
This is an important factor in the appraisal process. As a condition of FHA home loan approval, your appraiser must determine that the home to be purchased, the garage, or “other improvements” do not spill over or “encroach” neighboring properties.
“Encroachment by the subject or adjacent Property fences is acceptable provided such Encroachment does not affect the marketability of the subject Property” according to the FHA loan rule book, HUD 4000.1.
Onsite Hazards and Nuisances
There must be action taken, described in HUD 4000.1 as “corrective work” that will “mitigate potential adverse effects from any onsite hazards or nuisances reported by the Appraiser” in cases where onsite noise or nuisances are reported at appraisal time.
Abandoned Gas and Oil Wells
Does the property have an abandoned gas or oil well? Is there one close by?Your lender may require documentation from the local authority (which may be a state agency) that describes the well as having been done “permanently” and certifying that the well was “abandoned in a safe manner.”
HUD 4000.1 adds that in cases where there are “abandoned petroleum product wells”, the lender is required to make sure a qualified petroleum engineer “has inspected the Property and assessed the risk, and that the appropriate state authorities have concurred on clearance recommendations.”
Overhead Electrical Lines
The FHA appraisal process must insure that power lines mounted overhead “do not pass directly over any dwelling, Structure or related property improvement, including pools”. This portion of the FHA home loan rulebook also mentions that a residential service drop line “may not pass directly over any pool, spa or water feature.”
Property Access
One condition of loan approval involves having ”safe pedestrian access and Adequate Vehicular Access from a public or private street”. The roadways providing access to the property must be for “public use and maintenance, or retained as private streets protected by permanent recorded Easements”. State or local laws or code may also apply.
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There are several areas that can affect whether your dream home is able to be purchased or not and your FHA appraiser is the one tasked with determining if the issues below will interfere with loan approval or not. This is not a complete list, but it’s a good indicator of what your loan officer requires to move forward with your loan in certain cases.
Encroachment
This is an important factor in the appraisal process. As a condition of FHA home loan approval, your appraiser must determine that the home to be purchased, the garage, or “other improvements” do not spill over or “encroach” neighboring properties.
“Encroachment by the subject or adjacent Property fences is acceptable provided such Encroachment does not affect the marketability of the subject Property” according to the FHA loan rule book, HUD 4000.1.
Onsite Hazards and Nuisances
There must be action taken, described in HUD 4000.1 as “corrective work” that will “mitigate potential adverse effects from any onsite hazards or nuisances reported by the Appraiser” in cases where onsite noise or nuisances are reported at appraisal time.
Abandoned Gas and Oil Wells
Does the property have an abandoned gas or oil well? Is there one close by?Your lender may require documentation from the local authority (which may be a state agency) that describes the well as having been done “permanently” and certifying that the well was “abandoned in a safe manner.”
HUD 4000.1 adds that in cases where there are “abandoned petroleum product wells”, the lender is required to make sure a qualified petroleum engineer “has inspected the Property and assessed the risk, and that the appropriate state authorities have concurred on clearance recommendations.”
Overhead Electrical Lines
The FHA appraisal process must insure that power lines mounted overhead “do not pass directly over any dwelling, Structure or related property improvement, including pools”. This portion of the FHA home loan rulebook also mentions that a residential service drop line “may not pass directly over any pool, spa or water feature.”
Property Access
One condition of loan approval involves having ”safe pedestrian access and Adequate Vehicular Access from a public or private street”. The roadways providing access to the property must be for “public use and maintenance, or retained as private streets protected by permanent recorded Easements”. State or local laws or code may also apply.
------------------------------
RELATED VIDEOS:
Here's the Scoop on Conventional Loans
When Do You Need a Cosigner?
Analyzing Your Debt Ratio
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