Get Educated !! About Your Home Purchase B 4 U Close !

Getting a HUD or FHA type loan in Kentucky? 

You need to read this page and the references carefully!

 

 CLICK HERE to read the HUD/FHA Link on our Radon Testing Page to see how HUD/FHA encourages you to conduct Radon Testing but makes you responsible for Radon Testing and the Cost of Radon Mitigation. 

 

Don't let anybody fool you!  Several people have told me lately that FHA will be inspecting their prospective home purchase for them.  FHA does NOT inspect your home for you.  Some people who don't know any better or who don't want you fully educated will try to tell you that the FHA Appraisal is a Home Inspection.  THE FHA APPRAISAL IS NOT A HOME INSPECTION in any sense of the words!  Click on the four links below so that you are an educated buyer.

 

1.  See what the Kentucky Real Estate Appraisers Board has to say about FHA Appraisals versus Home Inspections

 

2.  Realty Times notes the differences in an FHA Appraisal and a Home Inspection

 

Barry Stone, Nationwide Syndicated Home Inspection Columnist on:

 

3.  HUD/FHA Appraisals versus Home Inspections  Click underlined text to read full article.

"Dear Jack,
In recent years, HUD established a new mandate for FHA appraisers, requiring that they perform what appears at first glance to be a complete home inspection. By this fiat, they enacted a dual disservice, establishing a false sense of security for home buyers, while encumbering appraisers with an unfair burden of liability. In characteristic governmental fashion, our bureaucratic guardians appointed persons unqualified for the task at hand, entangling the unrelated processes of real estate appraisal and physical inspection. "

 

4.  The Difference between Appraisal & Inspection   Click underlined text to read full article.

"Dear John,
Home inspection is viewed by some appraisers and even some contractors as a simple service procedure to be tacked onto an existing business. Such considerations reveal a broad misunderstanding of the divergent purposes and processes that separate home inspection from other professional fields. The tendency to see appraisals and home inspections as similar functions may arise from the fact that both vocations involve walking and writing. In like manner, these occupations could be said to resemble the process of authoring poetry while strolling through the woods, yet who would venture such an unlikely comparison?"

 

Extract from United States General Accounting Office (GAO) study of FHA Homebuyers  Home Inspections (Click here to read the full article on the GAO Web Site.)

 

One of the reasons often cited for getting a home inspection was to ensure there were no serious problems with the house. Homebuyers reported that two-thirds of inspections uncovered problems with homes. As a result, they benefited by being able to renegotiate their purchases. Buyers also reported inspections were worth as much or more than they cost and increased their confidence in their decisions to buy homes.

 

Buying a HUD Home? Read HUD's Home Inspection Policy

 

See the HUD Form "For Your Protection: Get a Home Inspection" Note the difference explained between Appraisal & Inspection and the Radon Testing Recommendation.

 

Excerpts from the Department of Housing and Urban Development web site (12-28-02):

 

"In August 1999, the Department of Housing and Urban Development unveiled the HUD/FHA Homebuyer Protection Plan, a package of far-reaching reforms that will benefit 800,000 families who get Federal Housing Administration mortgages each year..."

 

The Homebuyer Protection plan that HUD is implementing to cover all homes purchased with FHA insured mortgages will:

 

...Allow HUD Funds to be used for home inspections....

 

The Homebuyer Protection Plan went into effect on August 1. 1999.

 

Home Inspections

When you make an offer on a home, it's a good idea to make your offer contingent on a home inspection, conducted by an independent authorized inspector. You will have to pay for this inspection yourself, but it could keep you from buying a house that will cost you far more in repairs, down the road. If you are satisified with the results of the inspection, then your offer can proceed. If you aren't,you may want to negotiate, asking the seller to pay for certain repairs or asking for a lower price.

 

Appraisals

Your lender will require you to get an appraisal of the house you want to buy, to make sure it's worth the money that you're borrowing. You may select your own appraiser, or you may ask your real estate broker to help you take care of that.

End Excerpts