FHA Work And Fees

[Tom4value]

You made a good point, Tom4value. It definitely saves the time in going back if a conventional loan gets switched to FHA.

I have another question, suppose, the appraisal was originally done for a conventional loan, then it got switch to FHA, will you charge extra for the switch?

To be technical, we don't do a "switch". The intended users changed so it is a new assignment with a new appraisal file.

Assuming it is the same loan process and a week or two after I pass it in, I am told that the loan program switched to FHA. I see I took a pic of the attic and basement so I don't have to go back out. I see the comps from the original appraisal are still the best. I will build a new appraisal file, put in the FHA "verbiage", state that I did an appraisal on the property previously and the effective date, per the client has not changed and charged $50 to $100 (depending on client) for the work.

Keep in mind that if they (or another lender) comes back 4 months later and says they want me to "switch it to FHA"...nope. Full fee with a new inspection.

 

[ucbruin]

The nice thing about the areas I appraise, the homes either slab or basement foundations, thankfully no crawl spaces....

 

[Tom4value]

You made a good point, Tom4value. It definitely saves the time in going back if a conventional loan gets switched to FHA.

I have another question, suppose, the appraisal was originally done for a conventional loan, then it got switch to FHA, will you charge extra for the switch?

To be technical, we don't do a "switch". The intended users changed so it is a new assignment with a new appraisal file.

Assuming it is the same loan process and a week or two after I pass it in, I am told that the loan program switched to FHA. I see I took a pic of the attic and basement so I don't have to go back out. I see the comps from the original appraisal are still the best. I will build a new appraisal file, put in the FHA "verbiage", state that I did an appraisal on the property previously and the effective date, per the client has not changed and charged $50 to $100 (depending on client) for the work.

Keep in mind that if they (or another lender) comes back 4 months later and says they want me to "switch it to FHA"...nope. Full fee with a new inspection.

To the OP, the reason I charge more for FHA appraisals is because the SOW is more. The inspection taking longer is a big part of it.

I am not saying keeping your inspection to the SOW is wrong. I was saying what I do. Indeed, I use my judgement and may not stick to what I said on all assignments. I.e., a $600,000, 2 year old house has zero chance of being switched to FHA. May not open the scuttle and take a photo or turn on dishwasher.

I am saying that an inspection of a house generally takes little more time to satisfy FHA requirements as it does conventional loan requirements if you know what you are looking for.

 

[Tom4value]

The nice thing about the areas I appraise, the homes either slab or basement foundations, thankfully no crawl spaces....

True, but my biggest issue with FHA is the attic, specifically scuttle. For FHA appraisals, I ask the broker if it is a scuttle or walk-up/dropstair. It determines if I bring my ladder. I live in New England. We love our basements!!!!

 

[ucbruin]

True, but my biggest issue with FHA is the attic, specifically scuttle. For FHA appraisals, I ask the broker if it is a scuttle or walk-up/dropstair. It determines if I bring my ladder. I live in New England. We love our basements!!!!

Tom....
Don't you love it when the access to the attic is located just above the 1st step of the stairway leading down into the basement?

I ask myself who designed this and who approved it!!!

Be careful and stay safe....

 

[Tom4value]

Tom....
Don't you love it when the access to the attic is located just above the 1st step of the stairway leading down into the basement?

I ask myself who designed this and who approved it!!!

Be careful and stay safe....

Yup, bad.
Worst one was a 3 family. Scuttle was directly over the rear stairwell! It was an OSHA nightmare. I was crying for Mommy the whole time!

 

[ucbruin]

Yup, bad.
Worst one was a 3 family. Scuttle was directly over the rear stairwell! It was an OSHA nightmare. I was crying for Mommy the whole time!

And I've read many of your posts....
You are not a crier....

 

[Terrel L. Shields]

thankfully no crawl spaces..

lucky you. Many older homes here have very low crawl spaces and none were slab. I always hated a 1930s house for that reason for FHA. I agree that the extra time was a PIB, but only if I had some inkling it could go FHA would I "go the extra mile" to get a crawl space photo, or an attic photo on an ordinary loan (being in house more common for me than secondary market)...although I like to see the attic just to check to see if it ever had a fire or has cracked rafters. I am too old for that crawling around under a house now...just too hard to get on my knees or, for that matter, do much climbing on ladders. Poke my head in and look around, that's all. As for clients who routinely switched from conventional to FHA...they ought to have known what program was appropriate before hand, and I usually saw the opposite...that is, the FHA report is converted to conventional because (as if they shouldn't have known) the property won't pass muster with FHA.

As others have said before, basements in the heavy clay soils here are considered underground swimming pools. We have some walk out basements on hillsides but a full basement on flat ground? Very rare indeed and the last 2 I recall, one was an old house that I inspected with my uncle - an old insurance underwriter. It had a trapdoor under the rug and the buyer didn't even know it. And yes, it was full of water to about 2' from the ground level. The other was a house built on a turkey ranch. I used to date the rancher's daughter and he had moved there from NY and built a turkey farm. Built in the style he was familiar with, full basement. And it had water on the floor not to mention a ghastly steep stairs. Smelled like the old root cellar my grandparents had.

 

[glenn walker]

Hi all, I'm new to the FHA topics. I wonder since there is extra inspection for the health and safety,

• Do you guys usually charge more for FHA assignment? If so, how much?
• After you visit the property and list out the things to be repaired, do you go there a second time before the closing to ensure the marked items are repaired?

Thanks!

very few basements in California - No big deal most have a scuttle opening as far as fee's most will only pay you another $50.00 to a $100.bucks - If your in a high cost area of Cali no big deal but if you are in a low cost area that's' your business model and most of your work- So once again what area of California are you in ?

 

[RSW]

In answer to your second question, yes. FHA loans cannot close until th items are addressed and it is our determination with a 1004D.

Regarding your first question, yes, we generally get paid about $50 to $100 more because of the extra verbiage/explanation involved.

Back to the first part of your post. FHA qualified appraisers don’t “turn off” based upon the loan program. We ALWAYS inspect for health and safety items and report any and all of these items, regardless of loan program. If you hear that an appraiser who does an appraisal for a conventional loan has to go “back and inspect for FHA items” if the loan changes to FHA, you know that that appraiser is lazy during inspection.

Ok, so let's say you do 200 conventional loan appraisals per year and you are asked to convert 4 of them to FHA. Let's do the math. Let's say it takes you 10 minutes longer to do the FHA stuff. That is 2,000 minutes or 33 33 hours of time. Now let's say you had to go back out and do the MPR inspection on the 4 that is being converted to FHA at 1 & 1/2 hours each. That is only 6 hours. You are doing about 27 hours of work you are not being paid for. Doesn't make sense to me.