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Conventional to FHA.SAME LENDER

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Thread Starter
Sophomore Member
Jan 16, 2008
Professional Status
Certified Residential Appraiser
New York
Good Morning,

I did an appriasal for a lender last month for a conventional refinance. Last week the same lender ordered it as a new appraisal, new fee and new inspection. When I went back to the property I noticed two things that I did not mention in the conventional appraisl report. No handrail from the first floor to basement (about 15 steps) and no handrail form dining room to exterior patio (3 steps). I do not believe that the missing hand rails are a required repair and need only be disclosed for the u/w to decide about. Do I make this appraisal "subject to" and was is it mandatory to disclose the missing hand rails in the first report. I foresee the lender screaming at me about this! Thanks.

Marcia Langley

Senior Member
Aug 26, 2005
Professional Status
Certified Residential Appraiser

I do not believe you need to make your opinion of value 'subject to' adding handrails unless you think it is an important safety issue. You can describe the condition in your property description.

I see no reason to worry about having not reported the condition in the forst appraisal.

Your new assignment is truly new and should not reference the first assignment in any way.


Elite Member
Aug 14, 2007
Professional Status
Certified Residential Appraiser
HUD Mortgagee Letter 2005-ml-48

WASHINGTON, DC 20410-8000
December 19, 2005

<< snipped >>
Repair Requirements

As stated in Revised Appendix D, FHA now permits an “as-is” appraisal for existing properties that serve as security for FHA-insured mortgages when minor property deficiencies, which generally result from deferred maintenance and normal wear and tear, do not affect the safety of the occupants or the security and soundness of the property. FHA no longer requires repairs for these types of minor cosmetic deficiencies to bring a property into compliance with FHA Minimum Property Requirements.
Specifically, the guidance provided in Handbook 4150.2, CHG-1, Chapter 3,
· Paragraph 3-6, A-7 referencing all-weather road surfaces;
· Paragraph 3-6, A-8 referencing poor workmanship;
· Paragraph 3-6, A-11 referencing debris and trash in crawl space;
· Paragraph 3-6, A-16 referencing steps without a handrail;
· Paragraph 3-6, C referencing bare floors, badly soiled carpeting and cracked plaster and sheetrock is no longer applicable.
Additionally, the guidance provided in Handbook 4905.1, REV-1, Chapter 2, Paragraph 2-7, A-2 referencing all weather road surfaces; Paragraph 2-8 referencing poor workmanship and Paragraph 2-14, C referencing crawl spaces with debris and trash is no longer applicable. Any reference to the Valuation Condition form (form HUD-92564-VC) and protocol for its completion contained in Handbook 4150.2 is no longer applicable as well.
Examples of minor property conditions that no longer require automatic repair for existing properties include, but are not limited to:
· Missing handrails
· Cracked or damaged exit doors that are otherwise operable
· Cracked window glass
· Defective paint surfaces in homes constructed post 1978
· Minor plumbing leaks (such as leaky faucets)
· Defective floor finish or covering (worn through the finish, badly soiled carpeting)
· Evidence of previous (non-active) Wood Destroying Insect/Organism damage where there is no evidence of unrepaired structural damage
· Rotten or worn out counter tops
· Damaged plaster, sheetrock or other wall and ceiling materials in homes constructed post- 1978
· Poor workmanship
· Trip hazards (cracked or partially heaving sidewalks, poorly installed carpeting)
· Crawl space with debris and trash
  • Lack of an all weather driveway surface
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