FHA Expands Appraisal Validity Period for Certain Mortgages
Originally published on July 12, 2022 by Chris Clow for the Reverse Mortgage Daily.
The Federal Housing Administration (FHA) on Tuesday announced an increase in the appraisal validity period for all Single Family Title II forward and Home Equity Conversion Mortgage (HECM) transactions, increasing the period specifically for the HECM reverse mortgage program from 120 days to 180 days. This is according to the publication of Mortgagee Letter (ML) 2022-11.
The letter – signed by FHA Commissioner Julia Gordon – explains that the change is being made to streamline the administrative processes related to such programs, reduce associated costs, and document challenges that can arise from such matters.
“Industry feedback has encouraged FHA to simplify the appraisal validity policy and align with other agencies,” the ML reads in part. “Increasing the appraisal validity periods decreases administrative and financial burdens associated with obtaining appraisal updates. This change will also more closely align FHA’s initial validity period with the U.S. Department of Veterans Affairs (VA) Notice of Value validity period and the total validity period of appraisals for the Government Sponsored Enterprises (GSEs).”