What Red Flags Can Kill A Birmingham, AL Area FHA Appraisal?

FHA Appraisal Red FlagsHave you ever wondered if a house would pass an FHA appraisal inspection?  FHA does have more stringent appraisal guidelines than conventional loans but if you know what to look for then you can be ready before any problems come up.  I have included some of the top problems I have seen in my 20+ year career as a real estate appraiser.  I hope my experience can help you avoid some problems and make the FHA loan process smoother.  Here they are in no particular order:

Peeling Paint
This is one of the biggest problems I see, especially in older homes.  If a home was built prior to 1978 it is highly likely the paint contains lead.  It can be poisonous if ingested.  The best thing to do is remove the peeling chipping paint and repaint before you try to sell it or refinance your FHA loan.

Frayed Electrical Wires
Wires that are exposed can cause electrical shock and even be a fire hazard.  This is best repaired by reinstalling whatever was there to begin with or using caps to cover the bare wires.  These can be purchased at any hardware store and are inexpensive when compared to the wasted time and effort after the loan is in process.

Stuck Windows
This problem is normally seen in older homes but can also be present in newer homes with wood frame windows that have been painted shut.  There must be access to the outside from every room in case there was a fire or other situation that required quick exit.  The only exception would be a room that had access to the exterior by way of a door.  The stuck windows must be repaired so the window opens and closes easily.

Standing Water
Standing water is usually present in the crawl space of the home.  It can occur when water is not directed away from the foundation.  Instead of flowing around or away from the crawlspace it enters it and just sits there.  This standing water can result in mold, mildew, and even rotting wood.  It can be fixed by directing the water away from the home by a french drain or other similar method.

Curled and Worn Roof Shingles
Roof shingles provide protection from rain and weather.  When they are worn and curled they can allow rain to leak through the roof and into the home.  This can destroy the ceiling and also cause damage to flooring and other interior items.  If a roof has curled, worn, or cupped shingles the appraiser will typical call for a roof inspection to determine how much more life it has.  It is better to address the issue before hand, especially if you think the potential buyer will use FHA financing.

Termite Infestation
Termite infestation can cause a good deal to go bad real fast.  Appraisers look for signs of rotting wood that is caused by termite infestation.  This can be visible either in the crawl space or the attic.  Appraisers do not typically do an invasive inspection like removing parts of walls to inspect the interior wood frame.  They do look for obvious signs of deterioration though and when viewed will note this in the appraisal.

Utilities Not Working
One of the easiest things to do to prepare for an FHA appraisal inspection to the make sure the utilities are on and working.  The operation of the electrical, plumbing, HVAC, and other major systems are checked at the time of the inspection.  If they are not turned on then the appraiser must make a second trip after they are operating to make sure they work.  This can delay the closing and cost the buyer more money.

This is not a complete list of what appraisers look for but is one that includes some of the major items I have ran across in my day to day inspections.  I hope that it can help you avoid problems should you require an FHA appraisal.  If you have a question regarding other items please give me a call or email me and we can discuss it.  What are some concerns you have with FHA appraisal inspections?

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. Great job, Tom. This will be a good resource for agents you work with.

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