FHA Appraisal Red Flag: Water In The Basement

I recently did an inspection on a property that was being purchased with FHA financing.  I’m always asked by real estate agents, buyers, sellers, and mortgage lenders, “what do you look for when you do an FHA appraisal compared to a conventional one?”  One of the items we look for is moisture in either the crawlspace or the basement.  The home I recently inspected had standing water in the basement as you can see in the pictures below:

Birmingham, Alabama home with water in basement 2

Birmingham, Alabama home with water in basement

This is an important issue because the water could be caused by a problem with the plumbing system, a bad water heater, or a defective foundation.  All of which would need to be repaired prior to the loan closing.  Another related item that HUD use to require is the vapor barrier present in the crawl space of a home.  They are typically put in place to help provide a barrier to moisture, however HUD does not require this anymore.  The crawlspace does have to be checked for moisture, however.  Have you ever had a situation similar to this?  What did you do?

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on facebook.


  1. I have appraised several homes with standing water in the basement. Most have been similar to the photo above, but one was much worse. When I called the homeowner to confirm the appointment that day, she told me to make sure I brought waterproof boots. There was several inches of standing water throughout the basement.

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