Save Time and Money by Understanding the Three S’s of FHA Inspections
As president of AAA AMC for the past 5 years, I have picked up a few tips and tricks that can help save my clients time and money. Here is a suggestion that may help make your next appraisal inspection run more smoothly.
Many times when an agent orders an appraisal, they’re not aware that FHA inspections are more involved than inspections for conventional loans. This may result in the appraiser finding issues with the property and requesting items to be fixed for FHA’s minimum property requirements. This means the appraiser will have to come back for a re-inspection, which causes delays and additional costs to the buyer.
The good news is this can all be avoided when the agents address potential property issues ahead of time. FHA inspections use the three S’s as guidelines: Safety, Structure and Security:
Safety: They are looking for items that may impact the health and safety of the occupants.
Structure: They need to ensure that the improvements are structurally sound.
Security: They need to identify any risks the property may pose to the insuring FHA fund.
Below are links explaining what the FHA appraiser is looking for during FHA inspections – for both existing and new construction. Please feel free to share this info with your loan officers as a resource in helping with their FHA appraisals, I’m sure they’ll appreciate it!
Existing construction – Minimum property requirements HUD Handbook 4905.1
New construction – Minimum property standards HUD Handbook including 24 CFR 200.926d –
If you have questions about FHA appraisals or are looking for a reliable AMC to work with, please contact me at (949) 330-7680 or email me. I also welcome your comments below.