Conventional vs. FHA/VA appraisals

[The Nightfly]

I've had a discussion with some appraisers over the past few weeks about the level of inspection for conventional vs. FHA/VA mortgage appraisals. If conventional, do you ALWAYS inspect the way you would an FHA or VA (attic, crawl space, septic, HVAC, paint surfaces, etc.)? If so, or not...why? Just curious.

 

[Terrel L. Shields]

By "Conventional" I will assume you mean "Fannie mae" (or cousine Freddy)...your soon to be defunct taxpayer owned sponge for bad loans...each (FHA and Fannie) have their own appraisal guide. Get a copy. They are both on line. They are slightly different but an FHA inspection ought to be adequate for any fannie inspection...but not necessarily the other way around.. That head and shoulders peek in the attic, for instance.

If you refer to simple bank loan, that is, "In House", then the standard is USPAP, but then again the FHA appraisal inspection is going to be adequate for any inspection you attempt...just do it. What's an extra 30 minutes or less?

 

[Don Clark]

By "Conventional" I will assume you mean "Fannie mae" (or cousine Freddy)...your soon to be defunct taxpayer owned sponge for bad loans...each (FHA and Fannie) have their own appraisal guide. Get a copy. They are both on line. They are slightly different but an FHA inspection ought to be adequate for any fannie inspection...but not necessarily the other way around.. That head and shoulders peek in the attic, for instance.

If you refer to simple bank loan, that is, "In House", then the standard is USPAP, but then again the FHA appraisal inspection is going to be adequate for any inspection you attempt...just do it. What's an extra 30 minutes or less?

I agree. I use the FHA and VA criteria for inspection purposes, then tailor the report to Fannie Mae requirements if it is not FHA or VA. Been doing it that way for years.

 

[AnonApprsr]

I don't because it's accepting more liability for no discernible reason. I don't want to look in the attic for a conventional, and do not want to crawl through a dirt crawl space. What if I find something? LOL, I'm almost joking.... FHA Inspections cost more because of the work and liability of missing something you should have seen in the attic or crawlspace. My 2cents.

 

[Tom Woolford]

I don't because it's accepting more liability for no discernible reason.

I Agree....................

 

[residentialguy]

I'm not being paid to do the extra work, therefore, since it's not necessary for credible results, imo...I'm won't be doing the extra work. It's hard enough to get them to pay for all the extra work that's needed. I just had a complex residential order that wouldn't pay over $900. I felt that $1,100 fee was a bargin.

 

[Terrel L. Shields]

I don't want to look in the attic for a conventional,

Why would you think that reduces your liability? It potentially increases it. What if the rafters are painted with silver paint or kilz?... to kill the smell of burnt rafters in a house fire. It was easily detected by a simple inspection, and a court could rule it was well within your ability and therefore you have a "due diligence" to make at least a cursory inspection of the attic using a written standard...the "head and shoulders" treatment for instance. You best have an explicit caveat that you didn't do that crawlspace and attic inspection.

 

[residentialguy]

Why would you think that reduces your liability? It potentially increases it. What if the rafters are painted with silver paint or kilz?... to kill the smell of burnt rafters in a house fire. It was easily detected by a simple inspection, and a court could rule it was well within your ability and therefore you have a "due diligence" to make at least a cursory inspection of the attic using a written standard...the "head and shoulders" treatment for instance. You best have an explicit caveat that you didn't do that crawlspace and attic inspection.

1. You could take that "court could rule it was well within your ability" to any extent.

2. Kilz on rafters is as good as a rafter without smoke (unless there is burn damage). Nothing adverse in structure, safety, etc. At best, I would make note that there was a prior fire and has been repaired.

Do you really think the CYA ("You best have an explicit caveat that you didn't do that crawlspace and attic inspection") is necessary?

 

[Mr Rex]

What do your peers do? It's what is expected in USPAP and certainly what the man in the robe with the gavel will want to know. Best hope its not a jury trial, 12 people will in unison ask why you got paid $3-400 and didn't even look in the attic or crawlspace, when the opposing attorney points out that some of your peers do.:icon_idea:

 

[Couch Potato]

1. You could take that "court could rule it was well within your ability" to any extent.

2. Kilz on rafters is as good as a rafter without smoke (unless there is burn damage). Nothing adverse in structure, safety, etc. At best, I would make note that there was a prior fire and has been repaired.

Do you really think the CYA ("You best have an explicit caveat that you didn't do that crawlspace and attic inspection") is necessary?

Yes. It needs to be clear to anyone reading your report what you did, and did not inspect. Lines 427-432 of USPAP cover it quite clearly.

Keep in mind Fannie requires, "Appraisals based on interior and exterior inspections must include complete visual inspections of the accessible areas of the property." If the crawl space is accessible, you are required to inspect it.