• Federal Housing Administration appraisal involves three basic categories.young architect in front of industial construction site image by dinostock from Fotolia.com
  
  The Federal Housing Administration (FHA) is a federal mortgage insurance program for lenders where the borrower is responsible for the premium payments. Likewise, the FHA appraisal fee is the responsibility of the borrower. The purpose of the mandatory FHA appraisal is to ensure the lender has enough equity in a real estate property in the event the borrower defaults on the mortgage. Specific FHA rules apply to a variety of features of the property and generally are grouped into three broad categories: structural, operating system and financial.
  
  

Structural

• Roof, exterior and foundation are primary places checked during an appraisal.historical house image by Lise Powell from Fotolia.com
  
  A roof must be intact and free of defects and a foundation must be free of defects and viable for the existing home. Each has to be free of mold and have appropriate drainage such as sump pump, french drain or dry well if warranted. Sound exterior walls and weather protective windows are required. An appraiser will assess the property materials for asbestos, lead paint, wood treatments, wall coverings and safety hazards. Another primary focus is living critters such as termites. A check is also made for insects, mice, ants, bats, squirrels and infestations such as bees, houseflies, spiders and fleas. Any structural aspects the appraiser considers noteworthy is included in the report.
  
  

Operating System

• Electrical service is key.electric panel image by DXfoto.com from Fotolia.com
  
  Electricity service and code-compliant wiring is always viewed by an appraiser. Amateur wiring, frayed or exposed wire and inadequate fuse box or breaker panels are the primary focus. The water service to the dwelling is reviewed for sufficient pressure, water quality and leaks. Waste drainage and disposal must meet current local codes. The house ventilation is checked in the attic and the crawl spaces. The general neighborhood upkeep, noise level, nearby manufacturing and other factors beyond the property boundaries that could affect property value is noted. Supplemental operating systems such as wells, solar systems, windmills or generators must be in good repair and in working order. An abandoned well must be capped and sealed by a licensed worker.
  
  

Financial

• Any defect included in the appraiser's report must be detailed and in an itemized list and "cost to cure" must be included. The appraiser must review any sales transaction of the property within the last three years and must obtain the current tax assessment--both are required in the report. The lender must provide all financing details, including concessions such as loan discounts, down payment assistance, interest buy-down points, incentives and closing cost assistance to the appraiser for the report. Any money gifts or incentives and any personal property provided to the borrower must also be in the report. All financial aspects can influence a property sale, positively or negatively, and are required information in the appraisal report.