FHA Home Loan Appraisals - VC Sheets

Effective September 10, 1999 all FHA insured loans will require the appraiser to include the Valuation Conditions (VC) sheet (HUD Form 92564-VC) with the standard FHA appraisal.  The purpose of the VC sheet is to insure that the appraised property meets HUD's minimum property standards.

The form outlines several areas in and around the property that may require repairs to be completed before a borrower can close on his/her loan.  Areas covered include site hazards and nuisances such as excessive noise from traffic, property considerations such as soil contamination, drainage and termites, structural conditions such as significant cracks in the foundation, the roof, mechanical systems such as the furnace, AC, the electrical system and the plumbing, as well as health and safety issues such as the potential for lead based paint.

It is important to note that the VC sheet is not an inspection.  A home inspection gives the home buyer/seller more detailed information about the entire house.  The VC sheet details the minimum property standards required by FHA and does not include everything.  Furthermore, the conditions are evaluated by a licensed appraiser, not a home inspector.  The level of detail only involves readily observable conditions of necessary repairs.  

If any deficiencies are noted on the VC sheet, the home buyer must receive within five days prior to closing a copy of the Homebuyer Summary (HUD Form 92564-HS).  Any repair items indicated must be completed before the close of escrow.  If a home buyer receives the Homebuyer Summary in relation to an FHA loan, it is within his/her rights to request a copy of the VC Sheet and the appraisal.  It is the lender's responsibility to coordinate the repairs on the home (though not necessarily responsible for the cost of repairs).

Refer to HUD handbook 4150.2 for more information about the site and property considerations for an FHA insured property.    

You can download a copy of the following forms from this website: 

• HUD Form 92564-VC Valuation Conditions 

• HUD Form 92564-HS Homebuyer Summary 

(Please note that these forms are in the Microsoft Word 95/6.0 Format)