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Pros & Cons of FHA Appraising

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Tim Schneider

Thread Starter
Member
Joined
Feb 8, 2007
Professional Status
Certified Residential Appraiser
State
Wisconsin
Can someone please tell me the pros & cons of doing FHA appraisals. Thanks.
 

hglenbetts

Senior Member
Joined
Dec 3, 2007
Professional Status
Certified Residential Appraiser
State
Michigan
In my market, FHAs are about the only loan many of these owners with jumping rates can get into. It's about 60% of the office's business right now.:icon_idea:
 

swissarmy

Freshman Member
Joined
Jan 4, 2008
Professional Status
Licensed Appraiser
State
Utah
pros: More money.

cons: liability
 

Tim Schneider

Thread Starter
Member
Joined
Feb 8, 2007
Professional Status
Certified Residential Appraiser
State
Wisconsin
What is the common up charge for the additional requirements?
 
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Montana
Be Informed

Can someone please tell me the pros & cons of doing FHA appraisals. Thanks.

The appraiser has contractual responsibilities to both the lender and HUD. Per HUD
These contractual obligations to the lender and HUD/FHA are in addition to the appraiser's legal obligation to his or her credentialing state.

Before you take on FHA work, sit down and read carefully the section on Regulatory Environment, Enforcement and Sanctions. Read carefully the performance and sanction matrix. Notice such items as "Civil Penalties" and "Criminal Penalties."

Understand that there is a very high likelihood your reports will be reviewed and HUD will take action quickly and effectively if the report does not pass review.

The level of inspection is greater and that does not just mean you need a ladder to access the attic or you need knee pads to enter the crawl space. Read carefully the section on Special Neighborhood Hazards and Nuisances.
You have to be careful how you label rooms. Read the section on Basement Bedrooms, Basement Apartments.

HUD instructions constantly change. Consequently, there is more information to assimilate than with other assignments.
 

Otis Key

Elite Member
Joined
May 15, 2004
Professional Status
Certified Residential Appraiser
State
New Mexico
Con - they're running about 8 to 13 weeks to just get on the roster.
 

Lobo Fan

Elite Member
Joined
Nov 28, 2004
Professional Status
Certified Residential Appraiser
State
New Mexico
FHA is very strict about distances and times on comps used. Plus you are an inspector whether you want to be or not. You need to check the heating/cooling. hot water, and a random sample of electrical receptacles and lights. Peeling paint in older houses is a big deal, as is security iron.

If the homeowner gets behind because of big repair bills, the appraisal gets reviewed right away. Plus the people they use for reviews do not always know what they are doing.

They are a lot more responsibility than a regular appraisal. Not sure if it is worth the extra $50 or so you get.

In many markets that is all there is so you have to go for it. My Dad is a Realtor out in California. Nobody in his area knows jack about FHA because the limits were far too low to be useful. Even with the new limits they still only reach the bottom tier of his market.
 

swissarmy

Freshman Member
Joined
Jan 4, 2008
Professional Status
Licensed Appraiser
State
Utah
Tim,

Remember that every area is not the same for fees. As appraisers we cannot set fees. Therefore, I Should not give you the amount you should charge. I charge more, because it is more liability as some of the others have stated above. It takes more time to do the report and in my market, It's king at the moment.

Good luck and have fun with it.:icon_lol:
What is the common up charge for the additional requirements?
 
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