An Appraisers Perspective on FHA Reverse Mortgage Appraisals

By R W Taylor

As an approved FHA appraiser I have had occasion to provide many appraisals for people requesting an FHA Reverse Mortgage. While the basic appraisal process does not differ, it is a good idea for people requesting an FHA Reverse Mortgage, also known as a HECM (Home Equity Conversion Mortgage) to know what to expect when the appraiser comes to the house.

An FHA appraisal is really no different than a standard conventional appraisal as far as the value conclusion is concerned. However, more emphasis is placed upon the structural integrity of the home, and on any health and safety issues that may be present. For example, and probably the most well known of any FHA appraisal condition, the roof must still have at least 2 years of serviceable life remaining. This will quite probably be the biggest issue that may be faced by owners who have been in their homes for many years, have not replaced their roof, and decide to apply for an FHA Reverse Mortgage.

The serviceable life of any roof is a function of the type and quality of materials, the climate of the area, and general roof maintenance which has been provided. The FHA appraisal requirement of ‘2 years remaining life’ is somewhat a judgment call on the part of the appraiser, who will be familiar with appearances and with what is typical for the area. However, it may well be that a certification by a roofing contractor is required. If a roof has less than 2 years of remaining life it will become a condition of the appraisal that it be replaced and this becomes a significant factor which must be considered when applying for an FHA Reverse Mortgage (HECM).

Other. generally less costly, repairs may be required, however the roof issue is certainly the most likely to be a consideration. The other potentially major issue could be an unsound foundation affected by water and/or infestation.

This article is not by any means intended to reference any and all conditions that may arise as a result of an FHA appraisal, but is intended to make people aware that the overall condition of their home will play a part in the ultimate approval of an FHA Reverse Mortgage (HECM).

Want more information about Reverse Mortgages?

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http://www.prosandconsofreversemortgage.com is a free resource for anyone looking for a Reverse Mortgage or looking to learn more about mortgage loans in general.

Photo by Magnus Franklin

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