This article will provide an in-depth look at the Federal Housing Administration’s (FHA) appraisal requirements, as well as how they relate to the model building codes set forth by local governments.
The FHA’s appraisal regulations are designed to protect lenders and borrowers from potential losses that can occur if a property is purchased for more than it is actually worth. As such, the FHA has created a set of minimum standards that all properties must meet in order to qualify for FHA financing. These standards cover things such as structural soundness, compliance with health and safety regulations, and so on.
When determining a property’s value, the FHA appraiser will evaluate the home based on these standards as well as the overall market value of similar homes in the area. The appraiser will also consider the condition of the home and any repairs that may need to be made. If the home does not meet the FHA’s minimum standards, the appraiser must either recommend that the repairs be made prior to financing or reduce the value of the home accordingly.
In addition to meeting the FHA’s appraisal standards, properties must also comply with the model building codes adopted by the local jurisdiction in which the property is located. These codes are typically based on standards established by organizations like the International Code Council (ICC). The ICC publishes model codes every three years that local jurisdictions can use as a basis for establishing their own building codes.
These codes cover a wide range of topics such as the structure of buildings, fire safety, energy efficiency, plumbing, electrical wiring, HVAC systems, and more. In order for a property to be eligible for financing, the home must meet all applicable model building codes.
In summary, the FHA’s appraisal regulations set out a set of minimum requirements that all properties must meet in order to qualify for FHA financing. At the same time, all properties must also meet the model building codes set forth by local jurisdictions. It is important to note that both of these sets of standards must be met in order for a property to pass the FHA appraisal process. By taking the time to understand the FHA appraisal rules and how they relate to model building codes, potential buyers can be sure that they are purchasing a safe and structurally sound home.
This article was contributed on Jul 26, 2023