FHA appraisals: a homebuyer's guide

by Teresa Merelman, Broker 08/30/2023

FHA loans are special in the fact they are backed by the government, and have lower credit score and down payment requirements. To qualify with an agency who provides this loan type, the home you wish to purchase must meet certain standards.

During this appraisal process, an FHA appraiser will come out to the property and evaluate its condition to determine if the property is a good investment.

How tough are FHA appraisals?

Many assume an FHA appraisal is harder to get approved; however, requirements have relaxed in comparison to previous years.

In general, appraisers are there to make sure the sales price is fair in comparison to the loan amount. They examine the quality of the property to make sure there’s no health and safety hazards such as wiring and electrical problems along with other issues. As long as the home is up to code, you have a higher chance of approval.

Do FHA appraisals usually come in low?

Please note, low home appraisals may happen due to market conditions, but on average, they are almost equal in results in comparison to conventional loans. If you do get a low appraisal, you can renegotiate higher after an appeal or choose to opt for a different property.

How do I prepare for an FHA appraisal?

Before getting to the FHA appraisal process, make sure the property you’re interested in meets FHA appraisal guidelines. This includes, but is not limited to:

Good structural condition.
No damage to the heating and cooling system.
The electrical system is in great condition.
No mold or waste that can be hazardous.
Etc.

With the right amount of research and working with your real estate agent, you can find a great home meeting FHA appraisal requirements.

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About the Author

Teresa Merelman, Broker

Teresa's beginnings were at Fort Belvoir, Virginia. She was child #5 of 8 and born into an Air Force family that moved all over the United States but usually ended up back in the Washington, D.C. area. Teresa attended Miami University in Oxford, Ohio and received her bachelor's degree in business from George Mason University, in Fairfax, Virginia. Some of her prior careers include: computer buyer in Fairfax, Virginia; Deputy Clerk at the U.S. District Court in Denver, Colorado; Police Officer in Steamboat Springs, Colorado; and Bed & Breakfast owner in Stowe, Vermont. Teresa obtained her license as a Realtor® in 1998. She has been through many ups and downs in this profession and continues to learn every day. She very much enjoys the real estate profession and the wonderful people she has met and assisted along the way. In order to serve her clients and customers, Teresa continually attends classes and seminars. Some of her Designations and Certifications include:

ABR - Accredited Buyer Representative (2003)
CBR - Certified Buyer Representative (2000)
e-PRO - Internet Certified Professional (2001)
CNHS - Certified New Home Specialist (2005)
CRS - Certified Residential Specialist (2005)
AHS - Accredited Home-Stager Specialist (2008)
TRC - Transaction Referral Certification (2009)
RSPS - Resort and Second Home Specialist (2009)
GREEN - NAR's Green Designation (2009)
SFR - Short Sales & Foreclosures Certification (2009)
SRES - Senior Real Estate Specialist Designation (2012)
AHWD - At Home With Diversity (2021)
SRS - Seller Representative Specialist (2021)

Teresa has also served and continues to serve on several boards:

Lamoille Area Board of Realtors - President and Board of Directors
Vermont Association of Realtors - Board of Directors
NEREN (MLS) - Board of Directors and Shareholder
Vermont Real Estate Commission - as a member of VAR's Liaison Committee
Stowe Vibrancy - Board of Directors - this is a volunteer group that promotes activities in the Village of Stowe

In 2007, Teresa was named Vermont Realtor of the Year.Teresa and her husband, a local attorney, moved to Stowe in 1987. They had two sons and Stowe has been their home for the past 36 years. She still feels the Stowe area is a wonderful place to raise a family, there's always something going on. Teresa can often be found behind the lens of her camera documenting the beauty of the area and its many events.As an update, Teresa's older son is now a Doctor/resident at the University of New Mexico's Emergency Management Program. Her younger son graduated from James Mason University and currently resides in Chicago, IL as a supervisor for OKTA.