FHA Gives Lenders, Borrowers More Time to Use Appraisal Reports

The Federal Housing Administration (FHA) on Tuesday published Revised Appraisal Validity Periods guidance that extends the initial appraisal validity period from 120 days to 180 days and the appraisal update validity period from 240 days to one year for Single Family Title II forward mortgage programs.

These changes align FHA appraisal validity periods with industry practices, making it easier for lenders to manage appraisal validity while potentially reducing appraisal costs for mortgagees and ultimately, borrowers seeking FHA-insured mortgage financing. The guidance applies to case numbers assigned on or after June 1, 2022.

The appraisal validity period establishes the maximum time an appraisal report may be used for an FHA-insured mortgage. This also includes the time mortgagees can utilize an appraisal update to extend the initial appraisal validity period.

The updates highlighted in this guidance will be incorporated in a future version of the Single Family Housing Policy Handbook.