HUD will no longer provide appraisal on file. If lender requires an appraisal for closing a new appraisal will need to be ordered from the lender.
- Buyers Expense (Can be funded from closing costs on line 5 of HUD 9548)
- Lenders can get more guidance regarding HUD Homes and Appraisals through The FHA Single Family Housing Policy Handbook 4000.1
- Section II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
- Paragraph B. APPRAISER AND PROPERTY REQUIREMENTS FOR TITLE II FORWARD AND REVERSE MORTGAGES (09/14/15)
- Sub-Section 12. Programs and Products (09/14/15) See Housing Handbook 4000.1 Pages 527-531
- Paragraph e. HUD Real Estate Owned Properties (09/14/15)
- Sub-Section iv. Appraisals for HUD Real Estate Owned Properties Purchased With a New FHA-insured Mortgage
- A new appraisal must be prepared for all transactions involving the purchase of a HUD REO Property with a new FHA-insured Mortgage. The appraisal must be prepared in accordance with the requirements of HUD Real Estate Owned Properties except as noted.
(A) Property Meets HUD’s MPR
If the appraisal reveals that the Property meets HUD’s MPR, the Appraiser must complete the appraisal report “as is.”
(B) Property Requires Repairs
If the appraisal reveals that the Property requires repairs in order to meet HUD’s MPR, the Appraiser must provide an estimate of the cost to cure and complete the report “Subject to the following repairs or alterations on the basis of the hypothetical condition that the repairs or alterations have been completed.”
- A new appraisal must be prepared for all transactions involving the purchase of a HUD REO Property with a new FHA-insured Mortgage. The appraisal must be prepared in accordance with the requirements of HUD Real Estate Owned Properties except as noted.
- HUD Home FHA Appraiser will use the Property Condition Report (PCR) located on Addendum’s Tab at www.HUDHomeStore.com for condition of property and utility condition for their appraisal.
If the utilities are off at the time of inspection, the Appraiser must ask to have them turned on and complete all requirements under Mechanical Components. However, if it is not feasible to have the utilities turned on, then the appraisal must be completed without the utilities turned on or the mechanical systems functioning.
Make sure appraiser is following above Valuation Analysis! A HUD FHA Appraisal is Different From a “Regular” FHA Appraisal.