Expiration of Appraisals

Information by State  Print version

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