Risk Assessment & Mitigation 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 Risk Assessment & Mitigation flashcards as text
When an FHA appraisal involves a property with a history of insurance claims for water damage, what is the appraiser's primary concern?
Answer: Underlying structural or moisture-related defects that may persist and affect marketability
Repeated water damage claims suggest ongoing moisture intrusion issues; appraisers must assess whether conditions contributing to prior damage have been adequately remediated.
An FHA appraisal subject property has an aluminum wiring electrical system installed in the 1970s. What action is appropriate?
Answer: Flag it as a safety concern and recommend inspection by a licensed electrician
Aluminum wiring is a recognized fire hazard and FHA appraisers must flag it as a health and safety concern requiring evaluation by a licensed electrician.
For FHA appraisal purposes, how is 'market risk' defined in the context of neighborhood analysis?
Answer: The probability that property values in the neighborhood will decline due to economic or physical factors
Market risk in neighborhood analysis refers to the likelihood of value decline driven by factors such as declining employment, oversupply, or deteriorating physical conditions.
A property's roof has three layers of asphalt shingles. Under FHA guidelines, what must the appraiser note?
Answer: FHA requires that no more than two layers of shingles exist; a third layer requires roof replacement
FHA guidelines state that roofs with more than two layers of shingles must be removed and replaced, as additional layers can conceal damage and add excessive structural load.
How does an FHA appraiser assess risk when a property is located in a community without public sewer and the soil percolation rate is marginal?
Answer: A marginal perc rate raises concerns about septic system functionality and may require a professional soil and septic evaluation
Marginal percolation rates indicate that the soil may not adequately treat effluent, creating a health risk that warrants professional evaluation of the septic system's viability.
An FHA appraiser notes that a property is near a Superfund (CERCLA) site. What is the required action?
Answer: Note the proximity, assess potential impact on value and marketability, and recommend an environmental inspection if warranted
Proximity to a Superfund site can adversely affect marketability and value; appraisers must disclose it and may recommend an environmental professional's assessment.
Which of the following best represents an 'external obsolescence' risk factor in an FHA appraisal?
Answer: A nearby landfill that negatively affects property values in the neighborhood
External obsolescence arises from factors outside the property, such as a neighboring landfill, and results in value loss that cannot be corrected by the property owner.