Is a Home Inspection required when buying a home with an FHA Mortgage?
No, it is not, but it is often a good idea to get one anyway.
FHA does not require a home inspection as part of their mortgage approval requirements. The FHA uses the appraiser as their eyes on the property. If the FHA appraiser makes note of any potential problems with the home they will flag any repairs for completion prior to the closing. The FHA appraiser will not collect a copy of the home inspection. The home is inspection is a completely optional and it will not be used as official part of the approval.
That being said, it still can be a good idea to have an optional home inspection performed. In most cases, a home inspector will provide a much more in-depth and thorough analysis of a property’s physical condition than a real estate appraiser. An appraiser’s main objective is to ascertain the property’s fair market value. While the appraiser is analyzing the property to determine value, they will look for defects in the property but often this is just a surface inspection to catch anything that is obvious. A real estate appraiser is usually not licensed in, nor an expert in, other aspects of determining a property’s physical soundness, such as plumbing, foundation, masonry, or electrical work.
The appraiser simply makes a visual observation of any potential problems and then passes on the responsibility of actually assessing these problems to a professional who is licensed in those particular fields. For example, if an appraiser notices water spots on a ceiling, they will often require that the home buyer contact a licensed plumber to provide a report stating whether those water spots are the result of some larger plumbing issue. if they spot a frayed electrical wire, they may require that a licensed electrician inspect the property. The intensity of the analysis of the property’s physical condition is also a difference between the appraisal and the home inspection. The appraiser is often in and out of the house in 15 minutes. The home inspector might be there for hours as they check every electrical outlet and climb up on the roof.
Since the home inspection is usually done immediately after the home goes under contract, the home inspection usually does a good job of flushing out potential problems with the house before the appraisal even occurs. A home inspection that turns up a lot of problems, often causes the buyer to negotiate with the seller to rectify some property issues. If the home inspection and any repairs can not be agreed upon between the buyer and the seller, there is no reason for the buyer to spend any more money on the home by paying for an appraisal. In summation, the FHA does not require a home inspection, but because the appraiser just gives the quick “naked eye” assessment of the property’s physical condition, it wouldn’t be a good idea to rely on just the appraiser for what might be the biggest purchase of your life.