FHA

FHA appraisals must meet HUD’s Minimum Property Requirements (MPRs) and Minimum Property Standards (MPSs) in addition to standard valuation methodology. The appraiser checks: safety (electrical, gas, water heater, handrails), soundness (structural integrity, roof, foundation), and security (locks, windows, exterior doors). Required repairs must be completed before closing, which can affect timeline.

Typical FHA callouts include: peeling paint on pre-1978 homes (lead-based paint hazard), missing handrails on stairs of 3+ risers, double-tapped electrical breakers, missing or non-functional GFCI outlets near water, broken windows, missing carbon monoxide detectors, ungrounded outlets in newer construction, and roof deficiencies. None are insurmountable, but each must be addressed before closing.

Value methodology is the same as conventional appraisals — sales comparison analysis using market data — but the report is on FHA Form 1004 with additional MPR/MPS observations. The valuation result is no higher or lower than a conventional appraisal would produce; the difference is the property condition documentation.

Yes, but with conditions. The appraisal documents required repairs and provides an “as-repaired” value. The lender will then condition the loan on completion of the repairs, with a final inspection (Form 1004D) confirming completion. Repairs can be done by the seller before closing or by the buyer post-closing with escrow holdbacks in some cases.

FHA appraisals are valid for 180 days from the effective date for single-family transactions. If a loan doesn’t close within that window, an updated appraisal (Form 1004D update) may be required. Validity periods can vary for specific loan programs, so verify with your lender.