HUD HOC Reference Guide

Expiration of Appraisals

Chapter 1
Appraisal & Property Requirements
Page 1-06

A. Term of Appraisal. Effective for all case numbers assigned on or after January 1, 2010 the validity period for all appraisals on existing, proposed, and under construction properties, including HUD REO appraisals that have an effective date of on or after April 1, 2010, will be 120 days. Please see Mortgagee Letters 2009-30, 2010-08 and 2010-13 for more information.

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 the appraisal is within the 120 day validity period. A new appraisal is required for each refinance transaction requiring an appraisal.

C. Extension of Validity Period.

  • The original appraisal may be extended by 30 days to allow for the approval of the borrower and closing the loan provided the borrower signs a valid sales contract or is approved prior to the expiration of the appraisal. See HUD Handbook 4155.2 Chapter 4 FHA Policy on Appraisal Extension.
  • For case numbers assigned on or after February 15, 2010, the original appraisal report may only be updated one time via the completion of Appraisal Update Report (Fannie Mae 1004D/Freddie Mac 442), thereby capping the overall validity period for an appraisal being updated at 240 days. The update can only be completed by the original appraiser provided they are currently in good standing on the FHA Appraiser Roster. See Mortgagee Letters 2009-51 and 2010-13.

Content Archived: October 5, 2012