FHA APPRAISAL REQUIREMENTS

Effective April 1, 2009, FHA appraisers must now provide the following:

The Market Conditions Addendum (Fannie Form 1004MC/Freddie Form 71)
At least two comparable sales that occurred within 90 days of appraisal date
A minimum of two active listings or pending sales in addition to the three closed comparables
Bracketed listings using both dwelling size and sales price when possible
Adjusted active listings to reflect the list-to-sales price ratio
Adjusted pending sales to reflect contract sales price when possible
The original list price and any revised list prices
Reconciliation of adjusted values of active or pending sales with adjusted values of closed comparable sales
Absorption rate analysis
Known or reported sales concessions on active and pending sales

This update includes this warning: “Direct Endorsement Lenders are reminded that if the appraiser they selected provides a poor or fraudulent appraisal that leads FHA to insure a mortgage at an inflated amount, the lender is held responsible equally with the appraiser for the integrity, accuracy and thoroughness of an appraisal submitted to FHA.”