An FHA appraisal is tied to a property for a total of 120 days. This means that the appraisal report is considered valid for a period of four months from the date it was completed.
An FHA appraisal is a crucial step in the home buying process for those utilizing an FHA loan. It involves a professional appraiser evaluating the property to determine its market value and ensure it meets FHA guidelines. The appraisal report is used by the lender to determine how much they are willing to lend for the property.
FAQs about FHA appraisals
1. What is the purpose of an FHA appraisal?
The purpose of an FHA appraisal is to determine the fair market value of a property and ensure that it meets FHA guidelines for safety and soundness.
2. Who pays for the FHA appraisal?
Typically, the buyer pays for the FHA appraisal as part of their closing costs. However, the seller or lender may also pay for it in some cases.
3. Can an FHA appraisal be transferred to a new buyer?
No, an FHA appraisal is tied to a specific property and cannot be transferred to a new buyer. A new appraisal would need to be completed for any subsequent buyers.
4. What happens if the FHA appraisal comes in lower than the purchase price?
If the FHA appraisal comes in lower than the purchase price, the buyer may need to renegotiate with the seller to lower the price or come up with additional funds to cover the difference.
5. How long does it take to complete an FHA appraisal?
The timeline for completing an FHA appraisal can vary, but it typically takes one to two weeks from the time the appraiser visits the property.
6. What factors do appraisers consider when conducting an FHA appraisal?
Appraisers take into account factors such as the property’s location, size, condition, comparable sales in the area, and any recent upgrades or renovations.
7. Can a borrower choose their own appraiser for an FHA appraisal?
Borrowers cannot choose their own appraiser for an FHA appraisal. The lender is responsible for selecting an approved appraiser from their list of qualified professionals.
8. What happens if the property does not meet FHA guidelines during the appraisal?
If the property does not meet FHA guidelines during the appraisal, the lender may require repairs to be completed before approving the loan. In some cases, the sale may fall through if the issues are not addressed.
9. Can a home inspection be used in place of an FHA appraisal?
No, a home inspection cannot be used in place of an FHA appraisal. While both involve evaluating the property, they serve different purposes and are required for different reasons.
10. Can an FHA appraisal be used for a refinance?
Yes, an existing FHA appraisal can be used for a refinance as long as it is still within the 120-day validity period. If the appraisal is older than 120 days, a new appraisal would be required.
11. Can an FHA appraisal value be contested?
Borrowers have the right to contest an FHA appraisal value if they believe it is inaccurate. This typically involves providing additional comparables or evidence to support their claim.
12. What happens if the appraisal expires before closing?
If the FHA appraisal expires before closing, a new appraisal will need to be completed. This could delay the closing process and potentially impact the terms of the loan.