Profile picture for KasiLangley

Applying for usda loan, do i HAVE to get an appraisal/inspection?

I know I SHOULD but i have a family friend who used to do it and is no longer certified but i trust him. Is an appraisal/inspection NEEDED?

Also, can i have that included in closing costs or do i have to pay out of pocket?

  • August 19 2013 - Cottage Grove
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Answers (8)

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  • August 20 2013
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As already stated your lender and the USDA will require an appraisal that supports a value for the price you are paying for your new home. Most of the time the lender will require it be paid upfront out of your own pocket. You MAY be reimbursed for it at close in some circumstances but speak with your lender as the rules vary.

The inspection is altogether a different animal... this is to make sure you aren't buying a lemon of a home. I always recommend them, even on new construction. Too many times I have had a client go against best advice and end up in a mess of repairs. One client in particular that stands out had a root growing in the sewer line of a vacant home. They woke up to a flood in the basement their first night in the house... cost to repair was $8k without any recourse with a licensed and bonded home inspector.  This fee is optional, also upfront and out of pocket but well worth the peace of mind.

You absolutely SHOULD! Homes don't come with a return policy... why risk it?
  • August 20 2013
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Profile picture for Oregon Mortgage Pro
Regarding USDA also if that is the only program you are considering, you will need to get an appraisal for this program.
  • August 19 2013
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Profile picture for Oregon Mortgage Pro
If you are using agency-backed financing on a non-cash residential home purchase, an appraisal is generally required.

Ginnie Mae (FHA and VA) programs will require an appraisal.  Fannie Mae and Freddie Mac (Conventional Conforming loans) will generally require an appraisal, but it will depend on the results of the AUS (Automated Underwriting System) that at times (depending on application and home profile details, down payment) can provide an appraisal waiver or PIW (property inspection waiver).  These are generally rare and some lender overlays will still require an appraisal, but it's generally suggested that you assume you will need an appraisal.

This should be considered an out-of-pocket cost, or at least prepared to be.  Some lenders will have paid at closing for a sales technique, but this is an up-front 3rd party expense for any consumer buying a home and needs to be factored in the budget.  Discuss the estimated amount and details with your preferred licensed Mortgage Loan Originator.
  • August 19 2013
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The Appraisal is required if you seek financing but the inspection is optional. However getting an inspection can greatly benefit you! As for the appraisal it is TYPICALLY paid outside of closing...however you can have your closing costs included in the loan up to the appraised amount!
  • August 19 2013
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Profile picture for wetdawgs
If you wish to buy with cash, you can skip the appraisal and inspection.  However, as you wish to borrow money is it not possible that the lender wants unbiased third party evaluation of the property worth?

  • August 19 2013
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Appraisal is required (it determines value of the property to the lender-because it is required it is allowed to be rolled into the loan).
Inspection is optional (it gives the buyer piece of mind and a good idea of the life left and quality of the home). You can get anyone you want to do an inspection or opt to not get one at all.
  • August 19 2013
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Profile picture for Outer Banks N C
Appraisals are always needed. Inspections are up to the lender.

  • August 19 2013
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