FHA Appraisal Requirements
Effective for all case numbers assigned on or after January 1, 2010, the validity period for all appraisals on existing and proposed and under construction properties will be 120 days. This change aligns FHA’s requirements pertaining to the validity of an appraisal with current industry practices.
This is a change from the current validity periods of six months for an appraisal of an existing property that is complete, and 12 months for proposed and under construction properties.
How will this effect you as a buyer?
Not much, except in occurances where the property you purchase has an existing FHA appraisal. That appraisal is valid and 'stays with that property' for the 4 month period. Good news is, you won't need a new appraisal. Consider it streamlining of the process.
How will this effect you as a seller?
Bad news is if you are investigating into this your property probably didn't appraise out at the contract price. That appraisal 'stays with that property' for the 4 month period as mentioned with no exceptions. Now if the property values have declined in your area, you must still use that existing appraisal price and you'll come out ahead! If values have increased you might consider only accepting conventional financing on your home which would then exclude a large percentage of the buyer pool.
Another alternative negotiation would be for the buyer to come up with extra down payment dollars to cover the difference between the appraisal and the purchase price. This can be a problem because, let's face it, most FHA buyers have the minimum 3.5% down payment and rarely any extra cash. OR
The seller can adjust the sales price to the appraisal price of the home thus allowing the buyer to proceed with the minimum down payment.
Please contact me Lyn, I need more information!
Lyn Sims (847)230-7324
RE/MAX Suburban
Email: LynSims@msn.com
All data and information provided on this blog is for informational purposes only. Lyn Sims makes no representations as to accuracy, completeness, correctness, suitability or validity of any information on this site and will not be liable for any errors, omissions, or delays in information or any losses, injuries, or damages arising from it’s display or use.
FHA Appraisal Requirements ©2009 Lyn Sims - www.RealEstateConsumerInfo.com - www.RealEstateBuyMe.com
This is important information. I'm waiting to hear right now to see whether a property appraised.
Very good info. Thanks for passing it along.
Janice: Yep, it's been a bad couple of weeks for appraisals, good luck with yours.
Sandra: Since I've been having many not appraise, I wanted to get out the new information.