FHA and HUD Inspection Certification

Consumers and some lenders are often confused by the different types of inspections, certifications or appraisals required to secure FHA financing. For example, is a FHA and HUD inspection certification the same thing? Do I need an FHA home inspection if I have already had a home inspection, or does my home inspector have to offer a specific FHA and HUD inspection certification? Unfortunately, HUD has not clearly communicated to the public the difference between an FHA appraisal and home inspection. The reality is that the government does not require an FHA and HUD inspection certification at all.

A professional home inspection is one of the best tools today’s home buyers can use to help them evaluate whether or not they can truly afford the home they are considering. A homebuyer who has been approved for government mortgage assistance through HUD, however, is not required to get a professional home inspection. Instead, in the mid-1990’s HUD began to require FHA appraisers to report on the home’s condition in addition to the home’s market value. Unfortunately, this move has increased confusion among consumers who often mistakenly assume they do not need a third-party inspection because it was already included with their appraisal. Appraisers are required generally by the lending institution to determine the market value of property. Appraisers are trained to compare the characteristics of one home with similar properties and the value they recently were sold for to determine an approximate value for the appraised property. An appraisal does not, however, include documentation regarding the many mechanical and structural elements of the home which may be in need of repair. To offset the confusion regarding FHA Appraisers commenting on condition, HUD now provides a document that encourages home buyers to get a home inspection in addition to the mandated appraisal inspection. Click here to view.