May 30, 2014
Selling a home can be both a rewarding and challenging experience. From finding a Realtor® to marketing and finally getting an accepted offer. Now comes the inspections and appraisal process. Speaking as a home inspector, one part of the process that seems to have the most questions, and confusion, is pertaining to the buyers that have an FHA loan. What is the process that an appraiser uses to look at our home? What systems are they looking at? And the most common question, what are the guidelines when it comes to chipping and peeling paint?
The FHA does have regulations that govern the appraisal about peeling and chipping paint on properties that are built prior to 1978. According to the FHA official website, "for any homes built before 1978, check for evidence of defective paint surfaces, including: peeling, scaling or chipping paint. For all FHA insured properties, correction is required to all defective paint surfaces in or on surfaces and/or property improvements built before January 1, 1978 in accordance with 24 CFR Part 35."
The FHA also goes on to state "The appraiser is further instructed to provide a detailed description and identify the exact location of any deficiency under 'physical deficiencies' affecting livability. The appraiser is required to condition the appraisal on the 'repair' of any noted lead based paint deficiencies."
After the property has the corrections made, there may be a follow up inspection to ensure that the corrections were made according to guidelines. They go on to say, "FHA Roster appraisers and inspectors as well as other independent third parties may perform inspections to verify if painting repairs have been performed as required. These inspections are to determine completion of the repairs, not compliance with the Rule."
I ran across FHA News Blog that has a lot of great information about other aspects of an FHA loan such as an Energy Efficienct Mortgage! As the cold weather is quickly approaching if you are planning on obtaining an FHA loan or refinancing and existing FHA loan this is a great time to consider an Energy Efficient Mortgage.
The FHA Energy Efficient Mortgage, or EEM, program is designed to let a qualified borrower "to finance 100% of the expense of a cost effective "energy package," that is, the property improvements to make the house more energy efficient. The EEM Program recognizes that the improved energy efficiency of a house can increase its affordability by reducing operating costs."
Here in Wisconsin, you may be able to earn cash back incentives for the improvements made to your home through our Focus on Energy Progam. Funding is limited in this area and program incentives change yearly, so schedule your home performance evaluation before time runs out.