FHA Inspection Competence

[ZZGAMAZZ]

I have followed the FHA Forum for several months and realize that experienced appraisers bemoan the current FHA approval process because approval/certification has been diminished to become virtually non-existent; that FHA requirements have been diluted; and that some veteran appraisers do not perform FHA appraisals, although their rationale for not doing so often is not stated.

My questions for appraisers who regard themselves as fully competent to perform FHA appraisals/inspections:

1) How does an appraiser become competent to perform a FHA inspection? I could attend a dozen FHA seminars and not be competent to recognize moisture in a foundation, insufficient pitch that could result in a roof leak, non-compliant braces for a WH, malfunctioning shut-off valves, electrical junction boxes, faulty ductwork, etc., etc., etc., etc.

2) Why is the appraiser required to inspect at a level that IMO requires the knowledge of a licensed home inspector or contractor, rather than to require each FHA loan to be accompanied with a home inspection designed specfically to meet FHA standards?

3) How can an appraiser determine concerns that affect safety, security, or saleability that are within the appraiser's scope of responsibility?

Maybe the answer is "you'll know the answers when you know the answers" but I'm just wondering how others feel about the issue both experienced FHA appraisers and wannabees.

 

[TJSum]

Z, that debate/concern has been ongoing since the creation of FHA. Back in the day of the VC sheets, there was also a form given to the HO for their signature to clarify the difference between an appraisal and a home inspection. I do not know if that form has been retired along with the VC sheets, hopefully it has not. The worst thing, many agents were advising people not to get home inspections, because they told the purchasers the appraiser would "inspect" the home. That is one of the reasons why that form existed.

Anyway, the appraiser is responsible for an inspection of "readily observable conditions", any appraiser should be qualified for most items as long as they do the inspection at a pace lower than a slow trot. The appraiser does not have to move personal items around such as furniture, the home inspector may. The appraiser observes the roof from the ground level only, the inspector may actually walk the roof, etc. The home inspector will actually take components apart to analize more in depth. Actually when you really get down to it, it is all the same things we should be observing for all assignments to confirm the real condition of the home anyway.

 

[Marcia Langley]

ZZ,

TJ is right.

First, one really good class is the one offered by AI. You can get it on line. IMO a class is essential. Just trying to follow the guidelines is simply not enough.

Second, the trick is to write a very specific scope of work in which you describe exactly what your expertise and obligations as an appraiser are. Then describe in detail what they are not.



Here is some of the language I use:

Site:

I performed a visual observation of the subject site from walking height. I further researched the subject site by reviewing assessor's records, recorder's records, Multilist sales history records, and by interviewing the owner and the zoning authority.

The client should be aware that I do not present or represent myself as being an expert in surveying, drainage engineering, or the detection of hazardous substances. I reported my findings based on my training, experience, and obligations as a professional appraiser. If the client desires further assurance in any area of expertise they are invited to obtain professional opinions from experts in the field of concern. If elements or factors that could adversely affect my opinion of market value were hidden from me or not readily apparent to me and are found to exist, the disclosure of these adverse conditions could cause my opinion of market value to change. My research revealed the following:


FEMA FLOOD HAZARD MAPS:

The web based FEMA Flood Maps utilized in this report are deemed to be reliable but are not guaranteed by FEMA or by myself. If the client desires further assurances of flood zone information, they are invited to obtain an elevation survey and a flood certification.


Improvements:

I personally viewed and observed from standing height the subject improvements by walking around the complete exterior and the complete interior floor areas of the subject dwelling. I noted and reported all value affecting elements and factors that were readily apparent from standing height without moving personal property, snow, ice, leaves, or other elements that might obscure portions of the improvements. I viewed the attic and the crawl space from a head and shoulders entry into the attic and crawl space openings. Unless otherwise noted, I operated the furnace, air conditioner, a sampling of electrical outlets and switches, multiple plumbing fixtures to test water pressure and hot water, at least one window per bedroom, and all exterior doors.

The client should be aware that I do not present or represent myself as being an expert in construction, engineering, architecture, foundation engineering, roofing inspections , surveying, drainage engineering, mechanical inspections, electrical inspections, plumbing inspections, structural inspections, the detection of mold or other hazardous substances, or the detection of termites or other pest infestations. I reported my findings based on my training, experience, and obligations as a professional appraiser. If the client desires further assurance in any area of expertise they are invited to obtain professional opinions from experts in the field of concern. If elements or factors that could adversely affect my opinion of market value were hidden from me or not readily apparent to me at the time of my observation and are found to exist, the disclosure of these adverse conditions could cause my opinion of market value to change. My research revealed the following:

 

[Chris Colston]

Don't forget to mention that the property meets the minimum standard, per 4150.2 appendix D, for FHA residential properties. Also that HUD/FHA must be included as a client and as a specific intended user.

I use the old VC sheet as a guide. I still carry a device to check the electric outlets, I still check a random sampling of windows to be sure they open and stay open without being propped up, especially in bedrooms. I go "head and shoulders" into attics, I run the water in the bathroom sink and flush the toilet to check for water pressure and leaks. I run the hot water in the kitchen sink to verify the hot water heater is working and also to check for leaks. I turn on 2 burners on the stove to be sure that it works. The one thing I do not do, in Florida, because most of the time it's too warm, I do not check the furnace or heat pump. I do check the A/C. I verify the safety mechanism on the garage door opener either with a waste basket or a paper towel roll. I listen for noise and check for overhead high tension wires. I observe the roof from the ground level.

It is no longer a requirement to have a roof inspection for a flat roof. Unless there is obvious peeling paint or other health, safety or livability issues, FHA appraisals are no longer SUBJECT TO.

That's the basics, now read the manual and the mortgagee letters and take a class!!

 

[Mike Boyd]

Don't forget to mention that the property meets the minimum standard, per 4150.2 appendix D, for FHA residential properties. Also that HUD/FHA must be included as a client and as a specific intended user.

I use the old VC sheet as a guide. I still carry a device to check the electric outlets, I still check a random sampling of windows to be sure they open and stay open without being propped up, especially in bedrooms. I go "head and shoulders" into attics, I run the water in the bathroom sink and flush the toilet to check for water pressure and leaks. I run the hot water in the kitchen sink to verify the hot water heater is working and also to check for leaks. I turn on 2 burners on the stove to be sure that it works. The one thing I do not do, in Florida, because most of the time it's too warm, I do not check the furnace or heat pump. I do check the A/C. I verify the safety mechanism on the garage door opener either with a waste basket or a paper towel roll. I listen for noise and check for overhead high tension wires. I observe the roof from the ground level.

It is no longer a requirement to have a roof inspection for a flat roof. Unless there is obvious peeling paint or other health, safety or livability issues, FHA appraisals are no longer SUBJECT TO.

That's the basics, now read the manual and the mortgagee letters and take a class!!

Good advice, Chris!

 

[Mr Rex]

FWIW, garage door reverse is not an auto repair requirement anymore.

 

[TJSum]

I agree with Chris except for the garage door inspection using an object like a waste basket, see photo, might have some splaining to do to the HO...

Rex is the man for this question as he is also a Home Inspector and has 4150.2 memorized

P.S. Just kidding on the photo, it was a comp picture, but shows what can happen.

 

[RSW]

I have been doing FHA appraisals since 1995 and I like to pull out the handbook and read itfrom time to time just to keep my memory fresh. There is not way an appraiser can remember everything in the handbook. Make sure you read appendix D and the two mortgatee letters. I also purchased the special report on FHA Appraisng from Ann O'rourke. It has some good tips too. Good Luck!

 

[RSW]

Sorry for the spelling in the last post. I'm trying to eat and type at the same time.

 

[Chris Colston]

FWIW, garage door reverse is not an auto repair requirement anymore.

I know it's not, but I still like the "show". Make the borrower believe they are getting their money's worth. Most of the time I use the paper towel roll.

I've tried using the cat, but they get upset (the borrowers and the cat). It's hard to get the cat to stand still while the door comes down. Although, mine has a knack for blocking the electric eye so the door doesn't come down at all.