Reverse Mortgage Appraisals
Coester provides full service appraisals for reverse mortgages. Reverse mortgage appraisals are unique as they have to meet all of the typical appraisal guidelines as well as conform to HUD's appraisal guidelines. FHA recently adopted similar to the Home Valuation Code of Conduct that require an appraisal to be completed with "no influence" being placed on the appraiser.
Coester only uses FHA approved certified residential or certified general appraisers. We not only provide quality appraisals we also provide solutions for the reverse mortgage community that borrowers need and want. No other appraisal management company can meet the options and needs that Coester provides in the reverse mortgage space.
See article in ReverseMortgageDaily.com
HUD Also has a set of there own Property minimum standards.
FHA Minimum Property Standards.
With the extensive property and inspection requirements an FHA appraisal must meet. It can become confusing as to what needs to be fixed or not as well as what is acceptable by FHA. The HUD Handbook is over 450 pages thick and that is exactly why we have summarized important information below.
FHA has always had stringent appraisal requirements in that even minor defects in the properties condition needed to be remedied prior to closing the loan. In December 2005 FHA made a number of changes to their requirements, allowing for "As Is" appraisals, even if minor defects to the property condition exist which makes it much easier to obtain FHA Financing.
- You must use an appraiser from FHA's approved list which is the FHA Roster.
- As of Oct, 1 2009 FHA requires appraisers be certified residential or certified general. All licensed appraisers have been removed from there approved list in the effort to ensure accuracy of appraisals.
- The lender must provide the appraiser with a case number for inclusion on their report.
- Major deficiencies in the property's condition still require a cost to cure. It is always best to let the lender select the appraiser but even more so if you are getting an FHA appraisal because the appraiser must be well versed in FHA requirements.
Further Details of FHA appraisal changes:
FHA appraisals occurring on or after January 1, 2006 now only require repairs for conditions that rise above cosmetic defects, minor defects, or normal wear and tear. Appraisers must report ALL deficiencies but lenders can use professional judgment and prudent underwriting practices to determine when a property's condition is a threat to safety or jeopardizes structural integrity.
- This is a list of examples that no longer require automatic repair to existing properties, but are not limited to
- Cracked or damaged exit doors that are otherwise operable
- Defective paint surfaces in homes built after 1978
- Minor plumbing leaks such as faucets
- Worn or soiled floor coverings or finish
- Rotten or worn out counter tops
- Damaged plaster or sheet rock or other wall and ceiling material on homes constructed after 1978
- Trip hazards such as sidewalks or badly installed carpet
- Lack of all weather driveway surface
Examples of conditions that may be of risk to health and safety of occupants or soundness of property that continue to require automatic repair, but are not limited to:
- Inadequate access/egress from bedrooms to exterior of home
- Leaking or worn out roofs
- Structural problems such as foundation damage caused by settlement
- Defective paint surfaces in homes built before 1978
- Defective exterior paint on homes built after 1978 where finish is unprotected
FHA Inspection Requirements
FHA no longer mandates automatic inspections for the following items and or conditions in existing properties:
- Wood Destroying insects: only required if there is evidence of active infestation or appraiser states a need for one, mandated by state or local jurisdiction, or at lenders discretion
- Well (individual water system): It is required if mandated by state/local jurisdiction, if suspect of contamination or requires purification system, or when there is evidence of: pipe corrosion, intensive agriculture, coal mining/gas drilling, dump, junk yard, land fill, gas station or dry cleaning operation with in 1/4 mile, or if there is a bad smell, taste, or appearance
- Septic: only required if evidence of failure, mandate, or lenders discretion
- Flat or unobservable roof
Examples of conditions that still require automatic inspection, but not limited to:
- Standing water against foundation, or excessively wet basement
- Hazardous materials on site
- Faulty mechanical systems: electrical, plumbing, or heating
- Structural failure: settlement or bulging foundation walls