Appraisal Differences Explained! Conventional vs FHA vs VA

This blog was written by our Appraisal Manager, Beau McGlasson.

Agents and borrowers alike often find the appraisal process confusing and opaque – it’s why we consistently field questions on what appraisers look for when inspecting a property and how agents can best prepare. Not only can appraisers’ opinions on value make or break a deal, but they also play a crucial role in determining if the property in question meets all health and safety standards required for a clean appraisal (also referred to as the Minimum Property Standards, or MPS).

Though an appraisal does not replace a full home inspection, Underwriters and Investors rely on the appraiser’s report to determine if the property meets the MPS – this is true of conventional, FHA, and VA appraisals.

FHA and VA appraisals do, however, have slightly different health and safety checks that are required during the home inspection. B/c these different checks can be difficult to parse out online, we created a list below of the common health and safety checks required of all 3 types of appraisals, and the specific checks required for only FHA and VA.

CONVENTIONAL, FHA & VA

• Test for a properly working and strapped heater
• Validate every bedroom has 2 points of egress
• Ensure oven hood is present in any full kitchen
• Verify that there are properly placed CO and Smoke detectors
• Identify any exposed wiring or missing electric box cover plates
• Address any water damage issues
• Verify adequate heat source (does not need to be permanent)
• Check for evidence of termite damage
• Check for signs of foundation damage
• Verify no other obvious health and safety issues present (broken glass, broken doors/walls, animal droppings, etc.)

FHA & VA

• Identify any chipping, peeling or cracked lead-based paint – interior and exterior
• Verify the property has proper drainage
• Test for permanent working heat-source
• Test for adequate water pressure (both hot and cold) and ensure no water leaks
• Test for a working oven hood/fan (carbon monoxide danger)
• Ensure major appliances/garage door opener work
• If garage is attached, ensure the door from house to garage is self-closing
• Verify roofs have at least a 3-year remaining life
• Complete a head and shoulder inspection of attic and crawl space

VA ONLY

• Clear Section 1 Pest Inspection
• Certain heating systems, like solar, require a more standard “backup” system

Jay Voorhees at (925) 855-4491
Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646