FHA News & Info

This may be old news for some people but not everyone is familiar with the changes made by FHA.

On January 1, 2006, FHA revised many of their guidelines and requirements. These revisions are contained in the Handbook 4150.2 Revised Appendix D. These changes were made because of the revised 1004 appraisal forms released by Fannie Mae and Freddie Mac. Appraisers were required to use these new forms effective January1, 2006. The reporting requirements in the new forms matched those of FHA in many ways. As a result appraisers are no longer required to use the VC sheets in their reports. FHA also loosened its belt, so to speak, when it came to repairs. No longer are minor cosmetic repairs required. Appraisers are still supposed to report defects, as they should for all appraisals. The FHA Handbook states that:

Cosmetic repairs or examples of deferred maintenance that do not rise to the level of a required repair but must be reported by the appraiser:

• Surface treatments such as worn floor finishes or carpeting
• Beautification or adornment not required for preservation of the property such as holes in window screens or small cracks in windowpanes

Required repairs will be limited to necessary requirements to:

• protect the health and safety of the occupants (Safety)
• protect the security of the property (Security)
• correct physical deficiencies or conditions affecting structural integrity (Soundness)

Look for more details on FHA changes in later posts.