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FHA - use foreclosure/short as comp?

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kiki949

Thread Starter
Freshman Member
Joined
Sep 8, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
Does FHA have any regulation as to “can’t” use of foreclosure or short sales as comparables? It’s hard these days to find a normal sales comparables. Does anyone else have the same problem?
 

Greg Bell

Senior Member
Joined
Jul 7, 2006
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Louisiana
10.05
Appraiser must utilize REO comparables as long as they meet the following requirements:
A in the subject neighborhood or reasonable proximity
B comparable property subject to reasonable adjustment
C sold with willing buyer and seller
D exposed to market for a reasonable period

NOTE: It is not the intent of HUD for only REO comparables to be utilized.* ONLY use REO comparables if they meet ALL of the above criteria. If comparables such as these are not available, regular market comparables are to be used.* HUD 4150.2 Appendix A A.1.1 B. identifies that the appraiser must utilize REO comparables however, please note that this section does NOT specify that ALL comparables must by REO.* In an effort to ensure a fair market value, if appraiser utilizes 2 or more REO comparables, please include 1 additional regular market comparable for each REO comparable utilized and ensure sufficient weight is employed.
 

kiki949

Thread Starter
Freshman Member
Joined
Sep 8, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
Thank you Greg and Mr. Rex. Information provided was VERY helpful.
 
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