If you’re buying a home in Washington with an FHA mortgage loan, the property will need an appraisal from a HUD-approved appraiser. That appraisal includes a review of the home’s condition against HUD minimum property standards, but it is not the same as a buyer’s independent home inspection. That distinction causes a lot of confusion, so here’s what Washington borrowers should know before applying for an FHA loan.
If you use an FHA-insured home loan to buy a house in Washington State, the property you are purchasing will have to be appraised and inspected by a HUD-approved home appraiser.
Those are the two primary objectives for an FHA home appraisal in Washington State. Now let’s look at what makes the process unique from conventional mortgage loans.
Related: FHA limits for Washington
Home buyers are sometimes surprised to learn that the FHA-approved appraiser does more than estimate value. For FHA loans, the appraiser also reviews the property for basic condition issues tied to HUD standards. But this should not be mistaken for a full home inspection.
In other words, the FHA appraiser is not stepping into the role of a buyer’s home inspector. The appraiser’s job is to support the lender and FHA by assessing value and noting issues that relate to HUD standards, while a separate home inspector provides the more detailed, buyer-focused review many purchasers still want.
Related: FHA mortgage requirements explained
So, what does an FHA home appraiser actually look at during his or her appraisal and inspection? He’s primarily concerned with the condition of the house as it relates to the health and safety of the home buyer.
Section II-D of HUD‘s Single-Family Housing Policy Handbook states the following:
“The Appraiser must limit required repairs to those repairs necessary to: maintain the safety, security and soundness of the Property; preserve the continued marketability of the Property; and protect the health and safety of the occupants.”
In fact, the words “health and safety” appear numerous times throughout this section of the HUD handbook. That is the primary focus of the inspection portion of the FHA home appraisal.
Additionally, the handbook states that repairs are generally not required if they “do not affect the health and safety of the occupants or the security and soundness of the Property.” There’s that health-and-safety phrase again.
Listing all of the property requirements and standards for a Washington State FHA appraisal is beyond the scope of this article. There are pages and pages of them, and they are very detailed in nature. If you’d like to learn more about minimum property requirements for FHA loans in Washington State, refer to section II-D of the Single-Family Housing Policy Handbook (also known as HUD Handbook 4000.1).
Sammamish Mortgage can help. We serve clients across Washington, Idaho, Colorado, Oregon, and California. Since 1992, we’ve been providing several mortgage programs and products with flexible qualification criteria to borrowers across the Pacific Northwest. Visit our website to get an instant rate quote or to use our online mortgage calculator. Or, reach out to us if you are ready to get pre-approved for a mortgage.
Yes. If you use an FHA-insured mortgage loan to buy a home in Washington State, the property must be appraised by a HUD-approved appraiser.
FHA requires an appraisal that also includes a review of the property’s condition against HUD minimum property standards. That is not the same as a buyer’s independent home inspection, which is a separate and more detailed review.
No. An FHA appraisal is meant to determine market value and identify property-condition issues tied to HUD standards. A home inspection is a more comprehensive, buyer-focused evaluation of the home’s systems, components, and maintenance needs.
The appraiser has two main jobs: determine the current market value of the property and inspect the home to make sure it meets HUD minimum property standards.
With a conventional loan, the appraiser is mainly focused on the home’s current market value and how its condition affects that value. With an FHA loan, the appraiser still determines value but also reviews the property for basic condition issues related to HUD standards.
The review is primarily focused on the health and safety of the home buyer, along with the safety, security, soundness, and continued marketability of the property.
Repairs are generally limited to issues that are necessary to maintain the safety, security, and soundness of the property, preserve its continued marketability, or protect the health and safety of the occupants.
No. HUD guidance states that repairs are generally not required when issues do not affect the health and safety of the occupants or the security and soundness of the property.
The appraisal must be completed by a HUD-approved home appraiser.
Many buyers still want a separate home inspection because the FHA appraisal is not a comprehensive inspection. An independent inspector can provide a more detailed review of the home’s systems, components, and potential maintenance concerns.
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