Chapter
1
Appraisal & Requirements
Page 1-01
Purpose of the Federal Housing Administration (FHA) Appraisal and
Property Condition Assessment
The
appraisal and property condition assessment is used to determine
the market value and acceptability of the property for FHA mortgage
insurance purposes. The value serves as a basis for determining
the maximum FHA insurable mortgage loan. The appraisal is performed
for the use and benefit of HUD, and the lender involved in an
FHA transaction. In addition to providing an estimate of value,
the appraisal provides an examination of the property for any
visible, obvious and/or apparent deficiencies that may affect
the livability of that property in terms of basic needs, health
and safety of the property's occupants. HUD/FHA MAKES NO WARRANTIES
AS TO THE VALUE AND/OR CONDITION OF ANY FHA-APPRAISED PROPERTY,
therefore buyers/borrowers must determine for themselves that
the price of the property is "reasonable" and that it's
condition is "acceptable".
Note:
Borrowers should be encouraged to obtain a detailed HOME INSPECTION
of the property. Up to $300 of this fee is considered an allowable
fee.
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