FHA HOPE for Homeowners H4H
The appraisal for the H4H mortgage must be
performed by an appraiser on the FHA Appraiser Roster and
conducted using FHA guidelines.
Appraisal Practices in
It is expected that many of the
properties financed under this Program will be located in
declining market areas. Therefore, the following guidance is
provided to assist in ensuring that appraisers are providing
accurate property valuations. A declining market could be as
small as a neighborhood or as large as an entire state, and no
standard definition exists, other than a market in which home
prices are falling.
The purpose of the appraisal is
to provide the lender/client with an accurate, and adequately
supported, opinion of market value. It is the appraiser’s
responsibility in performing the appraisal to determine
whether a property is located in a declining market.
The neighborhood section of each
property specific appraisal form contains a subsection on
housing trends where the appraiser must mark a box indicating
whether property values are increasing, stable or declining.
Whichever box is selected, the appraiser is certifying that he
or she has performed an objective analysis of quantifiable
data supporting the observations made.
The appraiser must provide an
explanation in the “Market Conditions” section of the
appraisal report that includes relevant information in support
of the conclusions about appraised value relating to trends in
property values, demand/supply and marketing time. The
appraiser must also provide a description of the prevalence
and impact of sales and financing concessions and/or down
payment assistance in the subject’s market area. Other areas
of discussion may include days on market, list-to-sale price
ratios, and/or financing availability.
Appraisers and lenders are
reminded that a comparable sale should not be more than six
months old and should represent a closed sale. The appraiser
may utilize comparables that are more than six months old but
only with a clear explanation and justification. The lender
may require a new appraisal, if the appraisal and written
explanation are insufficient. The appraiser is not permitted
to use a comparable greater than 12 months old.
Pressure on Appraisers and Conflicts of Interest
Lenders/Brokers and appraisers must
avoid conflicts of interest which affect, either in reality or
in appearance, the credibility of the appraisal. A
lender/broker may not choose an appraiser that
has any interest, direct or indirect, in the property being
appraised. Instances of undue pressure or influence on an
appraiser reported to FHA will result in appropriate sanctions
against the parties involved.