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FHA Loans - Property Appraisal Qualifying
Once you have found the home you wish to purchase or you have decided to refinance, FHA will want to know that the house is worth the price you pay or the value indicated.

The FHA loan amount that the lender approves for you will be based on the appraised value of the property or the sales price, the lower of the two. Under FHA loan guidelines, you may obtain a FHA mortgage loan up to 98.15% of the property appraisal value.

The value of the property is a lender's best assurance that they can recover the money they lend, even if you stop making house payments. If you stop making payments, the lender has the right to sell your home to pay off the loan - this process is called foreclosure.

The lender wants to insure that the property could be sold at a price that's worth the loan amount. Also, should you decide to sell your home before you have finished paying off your mortgage loan, you'll also want to sell the house for a price that allows you to pay off the remaining  loan balance and perhaps make a profit as well.

That's why FHA allows only FHA approved licensed appraisers to appraise of the value of your home. We will require a professional appraisal of the home you choose to buy before the loan amount for your mortgage is finalized.

The appraiser will check for required FHA items to insure that the property does not contain any health or safety issue. FHA does not guarantee the condition of the property at the time of purchase and borrowers are suggested to obtain a home inspection report. Learn what a FHA appraiser must look for by viewing the actual form they must complete by clicking >> Here

In order to determine value, the appraiser must typically use the 3-5 most recent sales within a 1 mile radius of the subject property, that have sold within the last 12 months. The properties should be approximately the same size, with the same bedroom and bathroom count.

The appraiser will look at all of the properties an make adjustments to the sales prices based on the differences in size, condition, location, bedrooms, bathrooms, pools, etc. Based on an averaged of all of the properties with their price adjustments, the appraiser will then arrive at a value of the home.

Learn about some of the possible delays other than the appraisal that may take place during you transaction by clicking ra.gif (855 bytes)Here.


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We are not a government agency.  FHA home loans are not originated by the HUD or FHA. HUD only insures FHA loans and HECM reverse mortgages. FHA loans are originated and funded by HUD approved FHA home loan lenders. FHA-Home-Loans.com is not a mortgage lender and does not make or offer fha loans directly or indirectly.  Information about FHASecure refinance program to help borrowers who are facing foreclosure and must refinance.FHA-Home-Loans.com is owned and operated by a private company specialized in providing information about FHA loans and does not make or offer FHA home loans and FHA mortgages. FHA-Home-Loans.com is not affiliated with or owned, operated, endorsed or sponsored by HUD, Federal Housing Administration or FHA. Contact HUD directly at: www.hud.gov
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