On September 14, 2015, new FHA Guidelines were released and include clarification regarding the form type that is to be used for final inspections. In the past, Valuation Management Group’s clients would order the final using just the 1004D final form, but now there are 2 different forms.
The other form is the FHA Compliance Inspection form. The only time this form is used is when the home is within any of the following categories:
1 – Proposed construction or homes that are currently under construction
2 – Any property going under a substantial rehabilitation
3 – Any existing property that has repairs needing to be done to the major systems, such as structural.
The FHA Compliance form is not acceptable for an FHA re-inspection for minor repairs on an existing home; that is when the 1004D is ordered.
In addition, the appraiser is responsible for the following on New Construction homes that are 90% or more complete:
1 – The appraiser is required to document a list of all components to be installed or completed after the date of the appraisal.
For all reports, the appraiser has a responsibility to report Property Compliance with the following items:
1 – Appraiser has to observe, analyze and report that the said property meets HUD’S MPR and MPS.
2 – Appraiser is to state that the property meets minimum property standards (MPS) and refer to the regulatory requirements that any homes insured by FHA are not only safe, but sound and secure.
3 – Every property must be shown to be safe, sound and secure for the mortgagee to determine eligibility of the home. If the home is not safe, the appraiser needs to state every instance in which the home would not be considered safe, sound and secure and why it does not comply to FHA’s MPR and MPS.
Valuation Management Group wants to ensure that the correct product is ordered and the correct forms are used in order to deliver not only per the guidelines, but also to provide our clients with excellent service. If you have any questions about ordering a final inspection for FHA, please feel free to contact us.
Valuation Management Group is a national, full service appraisal management service company that manages the appraisal process for banks, mortgage bankers, and credit unions. We offer the full array of commercial and residential appraisal products and services. We take the appraisal process from ordinary to extraordinary.