What will come as welcome news to FHA Roster Appraisers – FHA has decided to rescind its short-lived policy to require appraisers to report the date(s) and sales price(s), that occurred within three years of the effective date of the appraisal, for each comparable sale.
In its much-publicized implementation of the 4000.1 Handbook and the accompanying Single Family Appraisal Report and Data Delivery Guide, many industry groups questioned the necessity of providing 3-year sales histories on comparable sales as this was not the industry standard.
Although a 3-year sales history is required to be provided on the subject property that is being appraised, having to research the sales histories for each comparable sale would prove to be time-consuming and unnecessary according to many FHA appraisers.
FHA’s Property Flipping Rule focuses on the property being acquired within 90 days and being sold for more than double in a year’s time. Why then should a three-year sales history of the comparable sales be deemed necessary? Although it may be beneficial to track trends in home values – that type of information is provided in the Market Conditions Addendum that is provided along with every appraisal report.
This existing policy has only been in effect for less than 2 months and was the topic of much discussion at the various industry webinars and conferences conducted by HUD/FHA staff prior to the September 14, 2015, implementation date.
What is most troubling, however, is the way that FHA has “announced” this revision in policy. In a Notice dated November 5, 2015 (FHA Info #15-86) – the major topic being discussed is the Electronic Appraisal Delivery (EAD) Portal Onboarding Phase Two that begins November 15, 2015.
Near the bottom of this Notice, there is a reference to changes made to the Single Family Housing Appraisal Report and Data Delivery Guide. The third bulleted item indicates that this Guide has been aligned for “the reporting of comparable sales from “within three years to within one year of the effective date of the appraisal”.
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You are encouraged to keep reading LoanLogics Blog Posts and Newsletters to stay current on the significant Agencies & GSE’s policy changes.
For those of you that want to obtain something in writing relative to this FHA policy change, the SF Housing Appraisal Report & Data Delivery Guide can be accessed by clicking this link.