Are FHA Appraisals Public Record?

For years Federal Housing Administration (FHA) appraisals have been aiding homebuyers in purchasing the house of their dreams. Tailored to help borrowers of all kinds, in order to gain an FHA loan, your desired property needs to go through an appraisal.

In this way, FHA can determine the selected properties’ market value, thus finding out whether the house is worth financing or not. Moreover, the U.S. Department of Housing and Urban Development (HUD) uses a variety of standards included in the Single-Family Housing Policy Handbook. Recently, changes were made in the rules and regulations followed by the FHA. Here we discuss all of that in detail:

What is an FHA Appraisal?
FHA loans refer to mortgages insured and offered by the Federal Housing Administration. Best suited for novice buyers or those with lower income and low credit, FHA loans are typically offered by the bank and backed by the federal government.

The benefit of acquiring FHA insurance is below-average interest rates, easier credit requirements, and low down payments. The flexibility and low rates allow buyers of all kinds to make a purchase.

What are the Differences Between FHA and Conventional Loans?
Properties bought via the FHA loan go through an appraisal process similar to a conventional loan. However, both loans differ in a variety of ways. These differences include:

• For starters, conventional loans aren’t insured by any federal agency, whereas FHA loans are insured by the FHA.
• FHA loans require a down payment of 3.5% for a minimum credit card score of 580. On the other hand, conventional mortgages start at 3% for credit card scores for copious savings exceeding 600.
• FHA loans are comparatively easier to score. In fact, even if your credit score is below 500 to 579, you can gain FHA loans featuring 10% down payments. Conventional loans typically require a credit score greater than 620.
• In order to qualify for an FHA loan, your debt-to-income ratio can go from 50% to below. However, conventional loans typically vary from 43% to less, only rarely ever reaching 50%.

What are the FHA Appraisal Requirements?
An appraisal simply means a written assessment of your desired property performed in order to approve the mortgage process. Here we’ve rounded up what you’ll need prior to applying for an FHA loan:

• A minimum of 3.5 % down payment in case your credit score exceeds 580
• A 10% down payment in case your credit score exists between 500 to 579
• A debt-to-income ratio of either 50% or below
• A documented and steady income alongside your employment history
• You should reside in the property as your primary residence
• You haven’t utilized a foreclosure in the past three years

How Does the Appraisal Process Work?

The appraisal process is pretty simple and won’t take a lot of time. First, an expert and adept FHA-approved appraiser will go to your property to analyze the interior, exterior, and ambiance. During this time, your appraiser might take relevant photos to document the condition of your property.

Moreover, if your residence is a single-family home, they’ll fill out the Uniform Residential Appraisal Report that overviews the features and structure of the house. On the flip side, a Condominium requires a Condominium Unit Appraisal Report.

After an in-depth inspection, the appraiser will offer the FHA an insight into the property’s market value. If the inspection reveals the property complies with HUD’s requirements, you’ll be good to go. If not, the appraiser will pinpoint areas that need repairs and an evaluated price of how much those will cost.

Are FHA Appraisals Public Record?
More often than not, people confuse FHA appraisals for conventional ones. Above we discussed the differences between them; thus, laws surrounding them also exist differently. Down below, we discuss whether appraisals are public records or not:

Are Appraisals Public Records?
First of all, it’s vital you keep in mind appraisals obtained via conventional loans are referred to as ‘appraisals’. On the other hand, appraisals gained with the aid of the FHA are known as ‘FHA appraisals’.

Moreover, you may order an appraisal whenever you need regardless of problems you may have had with previous lenders. It means that no, appraisals are not public records.

Then Are FHA Appraisals Public Records?
Typically, once your appraiser completes an FHA appraisal, they release it on the FHA website. In that way, your home’s appraisal becomes a quasi-public record.

The uploaded FHA appraisal stays attached to your property for the next six months. Most lenders avoid uploading bad appraisals.

What Does an FHA Appraiser Look for?
An in-depth study suggests that FHA has helped 4.6 current homeowners purchase a house. Here we’ve crafted a checklist of things your appraiser might look at when analyzing your house:

• The property should be a single real estate property.
• The property must include no hazardous conditions that can affect the health or safety of the residents or the structure of the house.
• The property must lack soil contaminants.
• The residence must be free from pests of all kinds.
• There should be no underground storage tanks. Moreover, the property must boast adequate and sanitary sewage disposal.
• Your residence should have an adequate water supply of safe and drinkable water.
• The property must be free of defective conditions such as leaks, decay, cracked windows, and so on.
• The house should offer proper natural ventilation in the attic and crawl spaces.
• The roof must be durable and well-built. In addition, it should ensure that no moisture will enter the house.
• The foundation and structure of the house must be sturdy and sustainable.
• The electronics in the house must be of optimum quality, functional, durable, and completely safe.
• The house must be free from lead-based paint.
• The residence must have access to adequate electricity.

What Should You Do in the case of a Low Appraisal?
Now there’s a slight chance your appraisal might come lower than the sales price. In instances like this, the FHA will not insure you. Instead, you may:

• Request the seller to lower the price of the home to match market values.
• Use your personal funds or some other form of financing to meet the asking price. However, keep in mind that you may be paying more than what the home is worth.
• In case the seller doesn’t reduce the asking price, and you can’t/don’t want to fill up the difference, you could consider leaving the deal.

For more questions surrounding FHA appraisals, contact our experts. We’re always happy to help!