FHA appraisal: refi, then a later sale

[Lloyd Bonafide]

I haven't had this happen before. I could look it up, but I can probably get a better/quicker answer here. :icon_mrgreen:

If someone does an FHA refi on an SFR, and then contracts to sell the property in less than 4-6 months, can the new buyer use the prior refi appraisal? If so, there would be no analyzing of the purchase contract in the appraisal. How would the lender handle that?

 

[Michael Tipton]

4155.2 4.4.e

Appraisals cannot be reused after the mortgage for which the appraisal was ordered has closed.​

 

[Lloyd Bonafide]

Thanks Michael -

What if an FHA appraisal is done for a refi, but the refi appraisal has not closed yet, (and will not be closed), and now the homeowner wants to sell the property to someone, and the buyer wants to get an FHA loan? Can they, or must they then use the prior FHA appraisal? I know this seems unlikely, but it is an actual situation.

 

[Michael Tipton]

http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?address=4155-2.4.4.e

http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?address=4155-2.4.4.d

http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?address=4155-2.4.4.j

 

[Lloyd Bonafide]

Thanks - I had read all those sections, but it isn't clear what to do if you go from a refi, (not closed), to a purchase. Do you think FHA would allow the lender to use the prior refi appraisal? Even if they did, I doubt if the FHA direct lender would accept the appraisal done for a refi, right?

 

[Michael Tipton]

Thanks - I had read all those sections, but it isn't clear what to do if you go from a refi, (not closed), to a purchase. Do you think FHA would allow the lender to use the prior refi appraisal? Even if they did, I doubt if the FHA direct lender would accept the appraisal done for a refi, right?

As long as the loan the appraisal was ordered for did not close, the appraisal can be used as long as it meets the life of appraisal requirement. The new borrower's lender can order another appraisal under the circumstances listed in the previously posted link. The type of prior loan, purchase or refinance, has no bearing.

The appraisal was written to determine market value. The type of loan, purchase or refinance, use the same definition of market value as defined in the FNMA forms required for use for FHA transactions.