By Joanna McCord
National City Mortgage, a division of National City
DMBA Member

Many homebuyers are now able to purchase a home that they otherwise may not have been able to a year ago. Thanks to changes in FHA (Federal Housing Administration) appraisal guidelines, gone are the days when FHA appraisal conditions stop buyers from purchasing the home of their choice.  Let’s review those revised guidelines and how these changes are beneficial to a potential homebuyer.

No one ever wanted a buyer to purchase a home that represents a risk to health and safety or in a condition which could jeopardize the soundness and structural integrity of the property. In fact, the FHA still requires that lenders use “professional judgment” and rely upon prudent underwriting practices to protect buyers. In years past, however, FHA has dictated that a buyer could not purchase a home with certain minor defects – even if the buyer was aware of the defects and did not see the condition(s) were of no concern to the buyer.  Today, minor defects caused by deferred maintenance and normal wear and tear are no longer an issue for FHA appraisals. Examples of minor property conditions that no longer require automatic repair include:

• Missing handrails
• Cracked or damaged exit doors that are otherwise operable
• Cracked window glass
• Defective paint surfaces in homes constructed after 1978
• Minor plumbing leaks (such as leaky faucets)
• Defective floor finish or covering (worn through the finish, badly soiled carpeting)
• Rotten or worn counter tops
• Poor workmanship
• Trip hazards
• Crawl space with debris and trash

Most first-time homebuyers don’t mind purchasing a home that requires a little TLC.  They are willing to provide that added care so they can afford more of a home. These FHA appraisal guidelines mark a long-awaited change that will enable more borrowers to purchase homes that previously would have been unavailable to them.

As always, all program guidelines are subject to change without notice. For up-to-date information, contact your local DMBA lender or get a referral from your Realtor to a qualified DMBA lender. You can also visit www.hud.gov/groups/appraisers.cfm