Condo - Conventional to FHA

[Green Hornet]

I have searched this forum and read the HUD Handbook, again, but cannot find an explicit answer.

I completed a report for a condo for conventional financing about 3 weeks ago. Lender calls and indicates they will now be going FHA and they provide the FHA #.

As luck would have it, I was in the area of the condo, called the borrowers, they were home so I was able to do a new inspection.

Q: Was the new inspection necessary or would FHA accept the original appraisal with an effective date prior to the issuance of the FHA #?

I doubt they would accept it, but just want to be sure. Your thoughts.

 

[Lanny A Freng]

New client = new assignment. They would probably reject the effective date anyway. New inspection was necessary, expanded inspection including mechanicals, water pressure, etc etc. I would charge em for a return inspection fee as well.

 

[ZZGAMAZZ]

Based upon my limited and recent pertinent experience, HUD DEFINITELY will accept an appraisal report with an effective date that precedes the date that the case# was issued. Some suggest that the relationship between the two dates might be described in the addendum. The original report would be appropriate only if the level of the property inspection was thorough to the extent that HUD inspection guidelines were met.

Stealing the thread and elevating the issue . . . would the appraisal file require documentation of the rationale for your decision that the opinion of value as of the original effective date report was sufficient to deliver a credible report, relative to today's date? Alternatively, is this decision significant to the extent that it would need to be addressed in the SOW?

 

[Michael Tipton]

FHA requires an appraiser to examine the mechanical, plumbing and electrical systems (Appendix D, pg D-90). It is a potential SOW issue.

 

[RSW]

I would re-inspect the subject property if the original inspection was not complaint with FHA SOW as mentioned in other posts in this thread. I know of many appraisers that do not do the same level of an inspection for a conventional inspection as they would for an FHA. It would also clear up the mess with the effective date of the appraisal report. It would be a new assignment. Just work out a deal with the lender as to what you would charge to go out and re-inspect and create an FHA appraisal.

 

[Green Hornet]

Thanks to all for your replies. I did reinspect the property and will complete as a new assignment.

I am thinking that it might be smart to start conducting every inspection as if it were FHA. I am sure that in this environment many borrowers start out conventional and then find they need to move to FHA.

The problem is the effective date. I will give the HOC a call.

 

[ZZGAMAZZ]

When you contact the HOC remember to ask them to clarify 4150.D.1.2 Selection of the Appraiser

When the lender selects an appraiser from the FHA Register,
the FHA Connection processes a case number for the lender.
The lender may assign the appraiser before receiving the
case number, but the case may not be submitted for endorsement without the case number...

 

[Marcia Langley]

New client = new assignment. They would probably reject the effective date anyway. New inspection was necessary, expanded inspection including mechanicals, water pressure, etc etc. I would charge em for a return inspection fee as well.

You mean new intended user=new assignment.