FHA Appraisals and FHA Home Inspections
The first? Borrowers applying for an FHA mortgage are required to have an FHA appraisal to ensure that the property meets minimum standards and to help the lender establish the fair market value of the home. THAT IS ALL. There are no guarantees implied when a home “passes” the FHA appraisal.
When the appraisal is done, it allows the loan to go through as long as any required corrections are made where applicable. The lender gets the fair market value of the home and the loan ideally proceeds as normal. Does that mean the property has been inspected and approved by the FHA?
No. The FHA has not “inspected” your home and you are not being made a promise via the appraisal that the home is defect-free.
The FHA official site says an appraisal is never a guarantee or endorsement. Buyers who mistake the appraisal for an inspection make a grave mistake. Why? Because the appraisal is a lender’s tool, not a buyer’s tool.
The appraisal is not intended to help you learn about issues with a home such as a bad foundation, leaky roofs, etc. Borrowers should never commit to purchasing a home without a home inspection IN ADDITION to the appraisal.
A publication and form on the FHA official site titled, For Your Protection Get A Home Inspection states, "...FHA does not guarantee the value or condition of your potential new home.”
Furthermore, the FHA maintains, “If you find problems with your new home after closing, we can not give or lend you money for repairs, and we can not buy the home back from you."
That is true REGARDLESS--even in cases where a home “passes” the FHA appraisal process.
Home inspections are a much more complete look at the home including the roof, foundation, mechanical systems, septic, and other areas, and goes into far greater detail than an appraisal.
The home inspection process (as opposed to the appraisal process) is the only way to be a fully informed borrower when purchasing your new home. You can find a home inspector in your local area but make sure they are professionally licensed or otherwise meet any professional requirements that may be enforced in your state.
The home inspection is just as important as the appraisal and has totally different applications. Never skip the home inspection, you want to make the most fully informed purchase you can.
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