Regulatory Framework & Compliance Flashcards
7 cards from real FHA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Framework & Compliance flashcards as text
Under FHA guidelines, which type of property inspection does the appraiser perform?
Answer: A limited visual observation of readily accessible areas
FHA appraisers perform a limited visual observation of readily observable and accessible areas — not a full home inspection — to identify obvious deficiencies.
Which FHA policy requires appraisers to report properties located in FEMA-designated Special Flood Hazard Areas (SFHA)?
Answer: HUD Handbook 4000.1 Minimum Property Requirements
HUD Handbook 4000.1 requires appraisers to identify and report properties in FEMA Special Flood Hazard Areas as part of the site analysis.
If an appraiser is asked to complete an appraisal update (Form 1004D) and the market has declined since the original appraisal, what must occur?
Answer: The appraiser must report the current market value, which may be lower
A Form 1004D update requires the appraiser to certify the current market value as of the update date, which must reflect actual market conditions even if lower than the original.
What is the primary purpose of FHA's Direct Endorsement (DE) program as it relates to appraisals?
Answer: It authorizes approved lenders to underwrite FHA loans without prior HUD review
Under Direct Endorsement, HUD-approved lenders can underwrite and close FHA loans without prior HUD approval, making the lender (and the appraiser it selects) responsible for compliance.
When two FHA appraisals exist for the same property with differing values, which appraisal does FHA policy generally require lenders to use?
Answer: The lower value appraisal
FHA policy requires the use of the lower of the two appraisal values when multiple appraisals exist, protecting against inflated loan amounts.
Under USPAP's Competency Rule, what must an appraiser do before accepting an FHA assignment in an unfamiliar property type or market?
Answer: Disclose the lack of knowledge and acquire the necessary competency before completing the assignment
USPAP's Competency Rule requires appraisers to disclose a lack of competency and take steps to acquire it before completing an assignment they are not qualified to handle.
FHA requires appraisers to report the presence of defective paint on surfaces in homes built prior to what year?
Answer: 1978
FHA requires appraisers to identify and report defective paint conditions on homes built before 1978 due to the risk of lead-based paint, requiring repair prior to closing.