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What is the difference between an appraisal for a conventional mortgage and an appraisal for a FHA ?

I applied for a conventional mortgage and the appraisal came in too low. The loan officer said I could apply for a FHA mortgage but the appraisal would have to be redone. The appaiser has to come out and look at the property again. What would he look at for FHA that he didn't look at for a conventional mortgage?
  • April 05 2009 - Brooklyn Park
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Answers (2)

For FHA appraisals, the key is "safety" and "functionality".  Safety would include fixing loose railings, peeling paint (lead based paint hazard), etc as examples.

Examples of Functionality would be having a working sink, running water, etc. 

In general, the property should be Safe (not hazardous) and Functional for FHA.  Keep in mind that you have the option to "remedy" if anything is in the appraisal report and having the appraiser come back out for a Final Inspection.  Also, FHA offers a 203k program in which the costs for improvements can be financed as part of the loan.  It's FHA version of the construction loan.



  • August 08 2009
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Doubtless this is too late to answer the question for you, but it may be of help to others.

Never expect a second appraisal to come in any higher than the first unless you expect that the appraiser has somehow overlooked other defensable comps.  The low appraisal, however, does give your Realtor a reason to negotiate a  price more in line with the appraised value.

FHA appraisals differ from traditional appriasals in only a few areas, aside from the assignment of an FHA case number.  More importantly, the appraiser must be approved to perform FHA apprisals.  The cost of an FHA appraisal is generally $75 more than a traditional URAR (Uniform Residential Appraisal Report or Form 1004).
  • August 08 2009
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