Stricter guidelines planned for HUD home appraisals

Real Estate Watch

June 07, 1998

The Department of Housing and Urban Development is overhauling its Federal Housing Administration home appraisal process in an effort to make it more responsive to those applying for FHA mortgages.

HUD plans to replace its existing system of appraisals with the Homebuyer Protection Plan. Currently, FHA appraisers give only a limited review of possible physical problems.

The new guidelines will include:

* A more thorough basic survey of the physical condition of the home.

* Disclosure of defects found by appraisers to potential buyers.

* Stricter accountability for appraisers and tougher sanctions on those who act improperly. Appraisers could be barred from doing FHA appraisals, fined or imprisoned.

* Requiring an appraiser to recommend a full inspection if a significant problem is found.

* Allowing HUD funds to be used for home inspections.

Pub Date: 6/07/98

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