What are the appraisal guidelines for basements and foundations?

The Appraiser must examine the foundation for readily observable evidence of safety or structural deficiencies that may require repair. If a deficiency is noted, the Appraiser must describe the nature of the deficiency and report necessary repairs, alterations or required inspections in the appraisal where physical deficiencies or adverse conditions are reported. 

For Manufactured Housing, the appraisal must be conditioned upon the certification of an engineer or architect that the foundation is in compliance with the Permanent Foundations Guide for Manufactured Housing (PFGMH) available at https://www.hud.gov/program_offices/administration/hudclips/guidebooks/4930.3G   

Basement:  The Appraiser must notify the Mortgagee of the deficiency of Minimum Property Requirements (MPR) or Minimum Property Standards (MPS) if the basement is not free of dampness, wetness, or obvious structural problems that might affect the health and safety of occupants or the soundness of the Structure. 

The Mortgagee must confirm that all foundations will be serviceable for the life of the mortgage and adequate to withstand all normal loads imposed. 

Note: Finished basements are not included in the total gross living area. 

For additional information see Handbook  4000.1 II.D.3.l.; II.D.3.l.i. at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-04107