DAIR Information

General Requirements

Interior Inspection Photo Requirements: Subject front, sides, street view, all interior rooms, neighborhood common areas, any damage.

Exterior Inspection Photo Requirements: Subject front, sides, street view, any common areas, any noticeable damage.

If damage is noted to the subject’s neighborhood, typically an interior/exterior inspection will be required, please confirm with your lender.

Steps To Follow

1) Determine if the subject property has sustained damage as a result of the disaster:

a) If the Subject property/neighborhood DID NOT sustain damage, a comment MUST be provided:

EXAMPLE: Having personally inspected the Subject property and surrounding neighborhood on the effective date of this report, I certify to the best of my knowledge and belief that there is no significant damage or reduction in marketability or value due to the recent disaster.                                                                             

b) If the Subject property DID sustain damage as a direct result of the disaster and:

If the damage was minor, cosmetic and/or did not rise to the level of Health & Safety, please provide an ‘as-is’ report with:

  • Detailed commentary & photos describing the ‘disaster-related’ damage and recommended repairs.
  • A corresponding cost-to-cure/condition adjustment to address the impact of the damage, if appropriate.

If the damage created a Health & Safety issue or significantly impacts marketability and/or value, please provide a report ‘subject to’ the required repairs and/or professional inspections with:

  • Detailed commentary describing the extent of the damage and required repairs.
  • Demonstrative photos of damage.

2) Comment on neighborhood conditions related to the disaster. If the NEIGHBORHOOD sustained damage, please provide descriptive commentary & photos and discuss any impact upon neighborhood marketability/property value trends.

3) Comment the marketability has not been negatively impacted.

4) Include one of the following comments:

  • If FEMA Incident End Date HAS been declared.
  • A FEMA disaster occurred in (COUNTY, STATE) on (FEMA INCIDENT START DATE) and the storms continued until (LAST KNOWN INCIDENT DATE), the end date has been declared to be (FEMA INCIDENT END DATE) and the appraisal was done on (INSPECTION DATE).
  • If FEMA Incident End Date has NOT been declared.
  • A FEMA disaster occurred in (COUNTY, STATE) on (FEMA INCIDENT START DATE) and the storms continued until (LAST KNOWN INCIDENT DATE), but the end date had not yet been declared when the appraisal was done on (INSPECTION DATE).

5) A copy of Appraiser license and E&O must be attached to the report.


 FHA Requirements                                                                        

In addition to the above mentioned items FHA requires the following:

1) For loans not yet closed, FHA requires:

a) An on-site inspection with interior/exterior photos.
b) A statement of dwelling habitability.
c) A statement as to whether damage is less than or equal to $5,000 or above.
d) When repairs are complete a final inspection with interior/exterior photos and form 1004D, Parts A and B, completed by the appraiser. If the market value has declined since the effective date of the original appraisal, a new appraisal is required that supports the loan amount prior to closing.

2) For closed but not yet endorsed loans, FHA requires:

a) A drive-by inspection with exterior photos.
b) A statement of dwelling habitability.
c) A statement as to whether damage is less than or equal to $5,000 or above.
d) Form 1004D Part B completed by the appraiser confirming completion of repairs.

3) The damage inspection report must be dated AFTER the Incident Period end date. The Incident Period is closed when an end date is listed on the FEMA website. For the definition of Incident Period see: http://www.fema.gov/disasters

4) In recognizing that utilities may not yet be restored in affected areas, FHA does not require the appraiser to ensure utilities are on at the time of this inspection. Please comment accordingly.

5) The report should be completed by the original appraiser, but if the original appraiser is not available, another FHA Roster Appraiser in good standing with geographic competence in the affected market may be used. If the lender uses a different appraiser to inspect the property, the appraiser must be provided with a complete copy of the original appraisal.

6) For damage less than or equal to $5,000:

a) The appraiser must provide an inspection report that includes an itemized repair estimate with costs.

7) For damage greater than $5,000:

a) the lender must obtain an itemized estimate from a qualified third-party. All damages regardless of amount must be repaired by licensed contractors or per local jurisdictional requirements, and the property restored to pre-loss condition with appropriate and applicable documentation.

8) FHA does not require a specific form for a damage inspection report, so any listed on page one of this job aid are sufficient.


Jumbo Requirements                                                                   

In addition to the above mentioned items Jumbo requires the following:

1) The damage inspection report must be dated AFTER the Incident Period end date. The Incident Period is closed when an end date is listed on the FEMA website. For the definition of Incident Period see: http://www.fema.gov/disasters

2) The 1004D form is required for Jumbo loans.

3) An Interior/Exterior observation is required.


For additional questions, please email: help@classappraisal.com