Zillow Advice: FHA Loans - FHA Appraisal

Justin had good information ...

Thu, 23 Jul 2009 14:56:00 GMT

Justin had good information in his response. I would add that there are 2 different levels of approval for FHA and a condo project; complete project approval and spot approval. The spot approval process is easier however does require that the Home Owners Association be in the control of home owners, not the builder, for at least a year. While there are many other requirements, I find that this is the biggest obstacle with new construction.We are having more and more challenges with FHA and condo approval primarily due to the increase in volume/shift to FHA. The lending criteria on the conventional side for condos have taken a major beating in rate and LTV adjustment. In the current lending environment, any LTV over 75% for a condo it is worth comparing the FHA program options. Not long ago that same mark for comparison would have been 90% or higher all other things equal.

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The time for closing will ...

Wed, 08 Jul 2009 18:31:00 GMT

The time for closing will be variable based on several factors. FHA recently changed guidelines on project approvals allowing lenders to do the work now rather than putting all approvals through the Homeownership Centers wtih FHA. They also have eliminated many of the inspections needed and the requirement for 10-year warranties in jurisdictions that issue a building permit and a certificate of occupancy.

That should assist in the time needed to get the project approved. However, you will have two other challenges to nail down the closing timeframe: (1) FHA requires 50% of the units to be sold before FHA will insure any unit. If sales haven't progressed to that level, you may have to wait until they do. (2) lower prices in the market may make getting a high enough appraisal difficult, but that is the builder's problem, not yours if they are offering FHA financing.

Good luck! If we can be of any help, please call.

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If they are experienced developers ...

Fri, 03 Jul 2009 18:43:00 GMT

If they are experienced developers they will have an "FHA package" ready for the lender. It should not be that big of a deal.

alli74,good day, FHA ...

Wed, 01 Jul 2009 20:41:00 GMT

alli74,
good day,
FHA does have detailed requirements for new construction "existing less than 1 year and have never occupied". the 1 year starts from the time your unit was issue a certificate of occupancy. in addtion to the information below, wood termite treatment inspections form 99a and 99b must be compelted.

The number of inspections required fo new construction will depend on the process used by the lender to qualify the property for FHA insured financing and the type of property. If the lender uses the process in Mortgagee Letter 2001-27, then the Certificate of Occupancy (or equivalent, such as a building inspection card) issued by the local government agency will be equivalent to a final inspection and that is the only inspection required under this process.

If the lender uses the Early Start process or has the appraisal completed prior to the beginning of constrcution, then three inspections are required: an initial inspection, a framing inspection and a final inspection.

If the lender uses a ten year warranty, then just a final inspection is needed. If the property is 100% complete at the time of appraisal the appraisal can serve as the final inspection. If not 100% complete, a final inspection by an inspector on HUD's Roster is required. If the property is under construction at the time of the appraisal and a ten year warranty is not being used, a final inspection by an inspector on the HUD Roster is required. The final inspection must be done by a HUD Roster inspector or an engineer--not the appraiser