Appraisal & Inspection

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Chapter 1
Appraisal & Property Requirements
Page 1-05

A: Appraisal fees

	HUD no longer establishes fees or due dates. See: Mortgagee Letter 1997-22.
	The appraiser and lender will negotiate the price and due date. This includes fees for canceled assignments, missed appointments, etc. Collection of unpaid fees is the responsibility of the appraiser. The Department expects lenders to promptly pay appraisers for work completed.
	Fee is paid for market value opinions based on HUD policy and procedure. Fees are never contingent upon the appraiser arriving at a predetermined specific value, a predetermined minimum value, a range or direction in value, a value that favors the cause of any party, or the attainment of a specific result or occurrence of a specific subsequent event such as loan approval.
	Appraisal Management Firms may charge the mortgagor a fee for the appraisal that may encompass fees for services performed by the firm as well as fees for the appraisal itself. However, the total of these fees is limited to the customary and reasonable fee for an appraisal in the market area where the appraisal is performed. Compliance with all aspects of RESPA is required While the owners/operators of such Appraisal Management firms may be licensed, the appraiser actually performing the FHA appraisal must be on HUD's approved Roster. No "supervisory" appraisals will be accepted. That is, the assigned licensed/approved appraiser must visit the subject and all comparable sales and complete the appraisal analysis. If any portion of the work involves assistance from others, the appraiser must summarize the extent of that assistance including providing the name (s) of those providing assistance. Appraisal trainees are not eligible to perform nor sign a FHA appraisal report.

	Inspection and Mileage Fee. HUD no longer establishes fees. Please see Mortgagee Letter 2006-04.
	203(k) Inspections. The fees for 203(k)s are outlined in HUD Handbook 4240.4 Rev-2 and Mortgagee Letter 1995-40.

	Mortgagee Letter 2005-48, Revised Appendix D, Page D-1 provides instruction on the use the four appraisal forms released by Fannie Mae in March of 2005. They are:   Uniform Residential Appraisal Report (FNMA 1004)   Manufactured Home Appraisal Report (FNMA 1004C)   Individual Condominium Unit Appraisal Report (FNMA 1073)   Small Residential Income Property Appraisal Report (FNMA 1025)
	Use of these forms is mandatory for all appraisals performed on or after January 1, 2006

Please see: HUD Handbook 4150.2 Section (1-2)