Chapter
1 Appraisal & Property Requirements Page
1-06 A.
Term of Appraisal. The appraisal has a term of six months for existing construction
and 12 months for proposed construction, properties under construction and those
undergoing substantial rehabilitation. However, if the appropriate HOC determines
that soft market conditions exist in certain areas or markets, it may shorten
the term of appraisals for proposed construction and substantial rehabilitation
to a period of less than 12 months upon advance notice to lenders. The term of
the appraisal begins on the day the home is inspected by the FHA appraiser and
this date appears on the appraisal form. Please see: HUD
Handbook 4000.2, Section 2-9. B.
Re-Use of Appraisal. Appraisals cannot be re-used after the mortgage for which
the appraisal was ordered has closed. For example, an appraisal used for the purchase
of a property cannot be used again for a subsequent refinance, even if six months
has not passed. A new appraisal is required for each refinance transaction requiring
an appraisal. C.
Extension of Appraisal. If a borrower signs a valid sales contract or is approved
for a loan prior to the expiration date of the appraisal, the term of the appraisal
may be extended, at the option of the lender, for 30 days to allow for the approval
of the borrower and closing of the loan. Approval of the borrower occurs when
the lender's DE underwriter signs the Mortgage Credit Analysis Worksheet, Form
HUD-92900-WS and/or
92900-PUR. For
information on the extension of the Firm Commitment please see: HUD Handbook
4000.2 |