Home Inspection vs. FHA Inspection: What’s the Difference?

Home inspection

An inspection isn’t always an inspection; sometimes it’s an appraisal.

With so many Federal Housing Administration (FHA) workers out in the field, you might wonder whether there’s really a market for home inspectors who don’t perform FHA inspections. The good news is that there is a market, and it’s growing all the time. The better news is that home inspectors and FHA inspectors aren’t in competition anyway.

Real estate transactions often require a home inspection, but not always. The same applies to FHA inspections, as mortgage loans backed by the FHA require one. There really is room for both kinds of inspectors, and here’s why:

Home Inspectors and FHA Inspectors Have Different Jobs

The use of the title and the fact that both home inspectors and FHA inspectors investigate the condition of real estate is the point where they’re the same. But unfortunately, at least for confusion’s sake, it’s also the point where their differences appear.

A home inspector is hired by the home owner or a real estate agent. The information that he gathers helps the owner or a potential buyer make informed decisions regarding the property. An FHA inspector is hired by the mortgage company. The information that he gathers helps the lender make informed decisions about the property.

Home inspection

FHA workers determine whether a home’s value supports the amount of the loan.

An FHA Inspection Determines a Home’s Value

Many home mortgage loans are backed and insured by the Federal Housing Administration. Because the lender isn’t there to see the property firsthand, set of eyes and ears on site is important. Columnist Barry Stone, for the Daily Herald, explains that FHA inspections are more akin to appraisals.

An FHA inspection helps the lender understand the real market value of a piece of real estate. This helps determine a reasonable amount to lend on a mortgage loan. While certain defects are generally noted, it’s the value of the property, not the existence of defects, that’s important in an FHA inspection.

Home inspection

A home inspector looks for problems, such as faulty wiring.

A Home Inspection Looks for Defects

Before buying or selling a house, a report on the condition of the property helps either party know what they’re getting into. For a seller, it could unearth repairs that he’ll need to make to support a better asking price or attract more potential buyers. For a buyer, it helps with deciding whether an investment is a good buy or more trouble than it’s worth.

A home inspection looks into safety and functionality issues that affect the condition of a house. Everything that’s visible, from the roof to the crawl space, gets attention. The inspector notes any defects found on the property, and a report is prepared and given to the party who hired him.

You have lots of factors to consider when deciding whether to start home inspector training. You’ll need the time commitment, determination to make your business grow, and a little bit of startup cash. But competition from FHA inspectors shouldn’t be a concern.

There’s room for both kinds of inspectors in the real estate market. They’re both important, but they also serve very different purposes. And there’s room for you, too.

If you’re ready to begin your home inspection training, enroll now and you’ll be on your way.

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