I talk with real estate agents quite a bit in my day to day work as a real estate appraiser. It seem like FHA appraisal requirements are the most confusing to them in relation to what appraisers look for during our appraisal inspections. By knowing what an appraiser looks for, the agent can better prepare the home for listing so that there are no issues to get in the way of a smooth closing.
MPR stands for Minimum Property Requirements. The three primary categories that an appraiser looks at are safety, soundness, and security. Items that fall under the safety category relate to the health, sanitary condition, and habitability of the property. Common types of problems include malfunctioning electrical service or even missing hand rails on stairs. Peeling or chipping paint can also affect the health and well-being of the occupants because it can be ingested and is poisonous. This is especially important if the home was built prior to 1978 when lead based paint was used .
Items falling under the soundness category relate to the actual structure and the structural components. This includes the foundation, roof, and walls on the inside of the home and porches and decks on the outside. These components could have been built incorrectly or may be deteriorated and rotted. The last category is security; not so much the security of the house itself but of the ability of the home to serve as security/collateral for the loan. This could include its marketability (which may relate to the first two items). If a home is in such a state of disrepair that no one would want to buy it then it would not be good collateral. If the bank had to take the home back in foreclosure it would be very hard to resell it.
This is just a brief summary of HUD Minimum Property Requirements. If you have any questions relating to appraisals for FHA loans please give me a call at 205-243-9304 I would be glad to help you.