What appraisal updates are required on a USDA Loan after a hurricane?

What appraisal updates are required on a USDA Loan after a hurricane?

With the disaster and devastation left behind by Hurricane Helene, I wanted to outline what homebuyers and Realtors should expect for transactions that are currently in progress.

As in previous years where hurricane activity affects related mortgage transactions, there are specific appraisal requirements that need to be taken once the storm ends and after disaster areas have been confirmed.

What are the inspection requirements steps for a USDA loan after a hurricane? 

Generally speaking, here is an outline of the steps that need to be followed:

1. Determine if the property is located in a FEMA declared disaster area
2. If so, prepare for a re-inspection of the property to be scheduled with the appraiser.
3. This re-inspection could be completed through forms such as an Appraisal Update, Fannie Mae For
   m 1004D, Fannie Mae Form 2075, Freddie Mac Form 442, etc.
4. However, depending on the loan program, lenders may dictate different forms or procedures.
5. Photos of the interior, exterior, or both may be required.
6.  The purpose of the report is to:
   1. Confirm if the disaster has affected the property; and
   2. Has the value of the property been negatively affected
7. Once the re-inspection report has been received and reviewed, that will determine:
   1. If the closing may continue as is, or
   2. If any required repairs, what needs to be completed prior to closing

Summary

Remember, if there is damage to a property, the level of severity can also be a factor in determining what additional steps may be needed to meet USDA minimum property requirements. 

Also, please note that this is meant to be a general overview of what could be expected because different loan programs and lenders may have separate requirements.

Sean Stephens | NMLS# 185288
Metroplex Mortgage Services, Inc. | NMLS# 185264
Call/Text: 863-593-2001