HUD/FHA - General Appraisal FAQ's

GENERAL Frequently Asked Appraisal Questions


  • 1. Is the Homebuyer Summary Form required for refinances?

Yes, on refinances from conventional financing to FHA and on cash-out FHA to FHA refinances. The lender must ensure that the appraiser is fully informed on the type of appraisal that is being ordered. Appraisers may routinely wish to complete the Valuation condition (VC) Form and the Homebuyer Summary.

  • 2.  Is the Homebuyer Summary Form required for streamline refinances with appraisals?

On streamline refinances with appraisals, all that is required is the VC form, not the Homebuyer Summary. Although FHA does not require repairs (except for lead based paint repairs) on streamline refinances with appraisals, the lender may require completion of repairs as a condition of the appraisal.

  • 3.  Is the Homebuyer Summary Form required for existing properties (over one year old)?

Yes. The form is also required for existing properties less than one year old. The form is not required for proposed construction and properties under construction.

  • 4.  Should the Homebuyer Summary reflect only items needing repair, or should it also reflect certifications that may be required (termite inspections, well test, septic certifications, etc.)?

The Homebuyer Summary should reflect ALL conditions noted on the VC Form; if none, the appraiser should so state.

  • 5. If there are no repairs or conditions, is the Homebuyer Summary Form still required?



  • 1.  Appraisers are concerned that a completed VC Form will be interpreted by some in the home purchase process as being equivalent to a Home Inspection. What measures are in place to ensure this will not happen? What role does the Lender play here?

The VC Form is for use by lenders and will not typically be issued to the borrower(s). Purchasers are provided with the Homebuyer Summary, which specifically provides them with a summary of the observations of an appraiser who visited the property, plus reminds them that an appraisal is different from a home inspection. The Lender's role is to ensure that the borrower(s) understand the Homebuyer Summary and acknowledges receipt of the form. Also, Form HUD-92564-CN "For Your Protection: Get a Home Inspection" is presented to the buyer(s), and requires a signed acknowledgment, before or at the same time the contract is executed.

  • 2.  Is the VC Form required for existing properties (over one year old)?

Yes. The VC form is also required for existing properties less than one year old. The form is not required for proposed construction or for properties under construction.

  • 3.  Is the VC Form required on a 203(k) case?

The VC Form is not required on a 203(k) case. However, if the appraiser identifies repair conditions that were not noted in the Plan Review (Specifications of Repairs/Work Write-Up) for the 203(k) loan, the appraiser should notify the lender before proceeding any further with the appraisal.

  • 4.  Why is there a "no" response available in sections VC-2 through VC-13, but not in VC-1?

"Yes" to any VC-1 item may make the property ineligible for FHA financing, as the condition cannot be remedied. "Yes" to VC-2 through VC-13 can usually be remedied.

  • 5.  What is the definition of "Readily Observable"?

Observations made by the appraiser of conditions that are immediately discernable and noticeable during the typical site visit. The appraiser is not required to move furniture, equipment or cause damage to the property.

  • 6.  What is a representative sample?

For multiple identical components such as windows and electrical outlets, one such component per room. For multiple identical exterior components, one such component on each side of the building.

  • 7.  Please explain the requirements for a termite inspection and are they also required for condominiums?

If the structure is ground level, or if the structure is wood and touches the ground, a termite inspection is required. In those geographic areas, which are not susceptible to termite infestation, a termite inspection is not required. However, an appraiser must note any infestation, any damage resulting from previous infestation, repairs due to infestation, or repairs necessary due to infestation. For condominiums, termite inspections are required for the first floor units only. If the unit is located on the second floor or above, a termite inspection is not required.

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