To become FHA-approved, a property must successfully pass inspection by a certified FHA appraiser. The appraiser will examine a certain set of criteria that will determine if the property is eligible for FHA-insured financing.
According to the FHA, this is the first general set of criteria for determining if a dwelling will be FHA approved: the property must be in a condition and location that are free of all known hazards and adverse conditions that affect the health and safety of occupants, the structural soundness of the improvements, or impair the use and enjoyment of the property.
FHA appraisers follow guidelines that are focused on the health and safety of the borrowers in addition to the overall aesthetics and condition of the home. During the appraisal, they focus on issues including broken windows, windows without screens and evidence of rodent infestation, among other things.
FHA appraisals are considered by some to be more comprehensive than appraisals for conventional loans. For example, many non-FHA appraisers don't look for signs of termite damage; they generally leave that to home inspection agents, whose services are optional. But FHA appraisers do inspect for wood rot, termite damage, roof damage and other red flags that might be left undiscovered by conventional inspectors.
Passing Along the Findings
The FHA appraiser reports any defects or issues to the lender and requires that repairs be made before the home can be cleared as FHA-approved and the sale consummated.
The FHA says it conducts such thorough appraisals to protect both the lenders and the borrowers.