November 22, 2016
If you are house hunting at the tail end of 2016 but don’t have a house selected yet, chances are good you’ll be very interested in learning about loan requirements and FHA appraisal standards for 2017. What does the FHA do on a yearly basis that can affect the appraisal process? After all, FHA loan limits for 2017 will be published soon, and the agency does do a review of market conditions in order to set and/or maintain those limits. What about appraisal rules?
The truth is, FHA appraisals are a set of standards that basically get changed when they are required to because of new laws, changes in housing standards, or other factors. There is no need to revise FHA appraisal rules on a yearly basis; changes come when they are deemed necessary.
When the FHA and HUD published HUD 4000.1, designed to consolidate single family home loan policies into a single rule book, it did revise and update many sections including appraisal standards.
Some of the appraisal changes at that time included additional scrutiny for homes based on nationwide substance abuse problems associated with crystal meth; a property deemed to be a “meth house” must be given additional certifications before it can be approved for an FHA mortgage.
That’s an example of an appraisal update that was required as a consideration of current issues in the housing market that were not evident at the time the original rules were written.
So for FHA appraisals in 2017, the information and instructions found in HUD 4000.1 still apply, and changes that may come in the future would be added on an as-needed basis. The FHA and HUD normally announce such changes via mortgagee letters; lenders, borrowers and brokers can access these mortgagee letters at the FHA official site. In many cases these mortgagee letters announce policy changes that have a “start by” date, but some alterations to FHA policy are effective immediately upon publication of the announcement.
Some may wonder if FHA appraisal fee changes are due in the new year, but since appraisal fees vary depending on the housing market, any changes there would likely be discussed on a local level.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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