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         FHA HOPE for Homeowners H4H           

Determining Eligibility Calculating the Maximum Mortgage
Consumer Protection & Disclosures Underwriting and Qualifying
Appraisals Documentation Requirements
Term & Rates of H4H Mortgages Prohibition Against Subordinate Financing
Mortgage Insurance Premiums Equity & Appreciation Sharing
  Extinguishment of Subordinate Liens


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 Declining Markets           

            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.   

Appraiser Responsibilities 

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.



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