FHA Appraisal
An FHA appraisal is an evaluation performed by a licensed appraiser to assess the value and condition of a property that is being considered for an FHA (Federal Housing Administration) loan. This appraisal serves two main purposes: to determine the fair market value of the property and to ensure that it meets the FHA’s minimum property standards for safety, security, and soundness.
During an FHA appraisal, the appraiser will:
Examine the Property: Inspect the property’s interior and exterior, including its structure, systems, and overall condition.
Assess Comparable Sales: Analyze recent sales of similar properties in the area to determine the property’s fair market value.
Evaluate Compliance: Ensure the property meets FHA requirements, such as adequate heating, plumbing, electrical systems, and no health or safety hazards.
The appraisal report is used by the lender to decide whether the property qualifies for an FHA loan and to establish the maximum loan amount. If deficiencies are found, the borrower may need to make repairs before the loan can be approved.