Final Inspection for another appraiser's FHA report

[Elliott]

My policy manual prevents me from doing review work and final inspections where an appraiser outside the company did the appraisal, especially when the other appraiser is 'out of town' or on 'vacation' or 'too far away.' It also keeps my E/O renewals lower, too. : )

 

[Sadie]

How do you know that without inspected the property for FHA guidelines?

Or you can say assuming the all condition required on the OA were met to meet FHA guidelines.

 

[shrubberyvaluation]

Will FHA reach this point ?

What is required for Form 1004D or alternative completion methods?

Form 1004D and Completion Alternatives

Form 1004D
The Appraisal Update and/or Completion Report (Form 1004D) is used to update an appraisal or provide confirmation that the requirements or conditions in an appraisal report have been met (such as completion of construction or repairs).

The appraiser can complete the Completion Report section of Form 1004D based on an on-site visual inspection of the property. The appraiser may also complete the form based on alternative methods, such as virtual inspections, digital photos, site videos, or other technological solutions. All completion documentation must include one or more visually verifiable exhibits. A link to the digital exhibits from within the form is acceptable but must be accessible by Fannie Mae for the life of the loan. These exhibits must be unaltered and able to be authenticated using metadata and the geocode for the subject property.

See B4-1.2-04, Appraisal Age and Use Requirements, for certifications completed by substitute appraisers.

Attestation Letters
Fannie Mae also permits other completion alternative methods - attestation letters - to verify completion of construction, alteration, or repairs in lieu of Form 1004D.

Borrower/builder attestation letter: For new or proposed construction, a letter is permitted to confirm the property was completed and constructed in conformity with the plans and specifications, amendments, and change orders. The borrower/builder attestation letter must include (at a minimum) the following items:

• borrower name,
• property address or legal description if the address is not available,
• certification language that the property was constructed in conformity with the plans and specifications including any amendments or changes,
• signatures and dates by the borrower(s) and builder, and
• exterior and interior photos of the property (see B4-1.2-01, Appraisal Report Forms and Exhibits).

If a letter signed by both parties is not obtainable, then a Form 1004D completed by the appraiser is required.

Borrower attestation letter: A letter is permitted to confirm completion of certain alterations or repairs for existing construction. The letter must include (at a minimum) the following:

• borrower name;
• property address;
• certification language that the alteration or repair was satisfactorily completed;
• signatures and date of the borrower;
• visually verifiable exhibits of the completed work; and
• one of the following
  • signature of the qualified professional,
  • a professionally prepared report, or
  • paid invoices for the alterations or repairs.

When either of these attestation letter options is used, a link within the letter to any digital exhibits is acceptable but must be accessible by Fannie Mae for the life of the loan. These exhibits must be unaltered and able to be authenticated using metadata and the geocode for the subject property. The letter and all documentation must be retained in the loan file.

Criteria for Use of Form 1004D and Completion Alternatives
Use of Form 1004D and completion alternatives varies depending on the type of valuation method and condition (completion, alteration, inspection, or repair) that must be verified.

Appraisals (Any appraisal report form including Hybrid and Desktop)
Appraisal "Subject to" Condition	Performer	Documentation Options
New or proposed construction - completion per plans and specifications	Appraiser	Form 1004D with site visit
Appraiser	Form 1004D with virtual inspection
Borrower and builder	Borrower/builder attestation letter with supporting evidence
Existing construction - repairs or alterations	Appraiser	Form 1004D with site visit
Appraiser	Form 1004D with virtual inspection
Borrower	Borrower attestation letter with supporting evidence
Existing construction - inspections requiring a professionally prepared report	Qualified professional	Professionally prepared inspection report The lender must determine if repairs are required as a result of the inspection, verification per above requirements.
Property Data Collection
Condition	Performer	Documentation
Existing construction - repairs or alterations	Borrower	Borrower attestation letter with supporting evidence
Existing construction - inspection requiring a professionally prepared report	Qualified professional	Professionally prepared inspection report The lender must determine if repairs are required as a result of the inspection, verification per above requirements.

And what is FNMA going to do if a borrower lies and uses pictures from a different property or pictures that cut out where the repair has not been completed.

 

[Sadie]

And what is FNMA going to do if a borrower lies and uses pictures from a different property or pictures that cut out where the repair has not been completed.

Not our problem. Its between the borrower and the lender.

 

[glenn walker]

Will FHA reach this point ?

What is required for Form 1004D or alternative completion methods?

Form 1004D and Completion Alternatives

Form 1004D
The Appraisal Update and/or Completion Report (Form 1004D) is used to update an appraisal or provide confirmation that the requirements or conditions in an appraisal report have been met (such as completion of construction or repairs).

The appraiser can complete the Completion Report section of Form 1004D based on an on-site visual inspection of the property. The appraiser may also complete the form based on alternative methods, such as virtual inspections, digital photos, site videos, or other technological solutions. All completion documentation must include one or more visually verifiable exhibits. A link to the digital exhibits from within the form is acceptable but must be accessible by Fannie Mae for the life of the loan. These exhibits must be unaltered and able to be authenticated using metadata and the geocode for the subject property.

See B4-1.2-04, Appraisal Age and Use Requirements, for certifications completed by substitute appraisers.

Attestation Letters
Fannie Mae also permits other completion alternative methods - attestation letters - to verify completion of construction, alteration, or repairs in lieu of Form 1004D.

Borrower/builder attestation letter: For new or proposed construction, a letter is permitted to confirm the property was completed and constructed in conformity with the plans and specifications, amendments, and change orders. The borrower/builder attestation letter must include (at a minimum) the following items:

• borrower name,
• property address or legal description if the address is not available,
• certification language that the property was constructed in conformity with the plans and specifications including any amendments or changes,
• signatures and dates by the borrower(s) and builder, and
• exterior and interior photos of the property (see B4-1.2-01, Appraisal Report Forms and Exhibits).

If a letter signed by both parties is not obtainable, then a Form 1004D completed by the appraiser is required.

Borrower attestation letter: A letter is permitted to confirm completion of certain alterations or repairs for existing construction. The letter must include (at a minimum) the following:

• borrower name;
• property address;
• certification language that the alteration or repair was satisfactorily completed;
• signatures and date of the borrower;
• visually verifiable exhibits of the completed work; and
• one of the following
  • signature of the qualified professional,
  • a professionally prepared report, or
  • paid invoices for the alterations or repairs.

When either of these attestation letter options is used, a link within the letter to any digital exhibits is acceptable but must be accessible by Fannie Mae for the life of the loan. These exhibits must be unaltered and able to be authenticated using metadata and the geocode for the subject property. The letter and all documentation must be retained in the loan file.

Criteria for Use of Form 1004D and Completion Alternatives
Use of Form 1004D and completion alternatives varies depending on the type of valuation method and condition (completion, alteration, inspection, or repair) that must be verified.

Appraisals (Any appraisal report form including Hybrid and Desktop)
Appraisal "Subject to" Condition	Performer	Documentation Options
New or proposed construction - completion per plans and specifications	Appraiser	Form 1004D with site visit
Appraiser	Form 1004D with virtual inspection
Borrower and builder	Borrower/builder attestation letter with supporting evidence
Existing construction - repairs or alterations	Appraiser	Form 1004D with site visit
AppraiserYes it will	Form 1004D with virtual inspection
Borrower	Borrower attestation letter with supporting evidence
Existing construction - inspections requiring a professionally prepared report	Qualified professional	Professionally prepared inspection report The lender must determine if repairs are required as a result of the inspection, verification per above requirements.
Property Data Collection
Condition	Performer	Documentation
Existing construction - repairs or alterations	Borrower	Borrower attestation letter with supporting evidence
Existing construction - inspection requiring a professionally prepared report	Qualified professional	Professionally prepared inspection report The lender must determine if repairs are required as a result of the inspection, verification per above requirements.

Yes it will

 

[glenn walker]

Actually the FHA DE Endorsed Underwriter has been able to do this for years but most wont unless an appraiser cannot be located.. Logical for small items like a missing Smoke detector where some appraiser drives 50 miles and $150 to take a photo. But yes in my opinion it warranted a cahnge and flexibility for owners-Realtors and Non-licensed to do small and minor inspections and photos.

 

[Cob]

I am doing an FHA final for a bank because the other appraiser is out of town. One final was done but two of the repairs were not completed. Do I need the original report, or will the 1004D and addendum with explanation (detailed) from the other appraiser suffice?

The appraiser is "out of town" Man, that's older than the check is in the mail, I simply do NOT complete these for any client, period, end of story.

 

[glenn walker]

The appraiser is "out of town" Man, that's older than the check is in the mail, I simply do NOT complete these for any client, period, end of story.

When I managed a fee panel we had appraisers on Vacations for two to three weeks, ones sick, some died, kids sick you name it and many were legitimate excuses. On those I did some of the 1004-Ds and others, we sent to appraisers on our panel, So yes it does happen and especially during the Holidays and Summer.

 

[Cob]

When I managed a fee panel we had appraisers on Vacations for two to three weeks, ones sick, some died, kids sick you name it and many were legitimate excuses. On those I did some of the 1004-Ds and others, we sent to appraisers on our panel, So yes it does happen and especially during the Holidays and Summer.

The funny thing is I have never had a "the appraiser is out of town" on a simple cookie cutter new construction property where the final inspection is to simply go to the property after completed, it's ALWAYS some weird older property that had some major issues and work that needed to be completed, NEVER something easy, that's been my experience anyway.

 

[shrubberyvaluation]

The funny thing is I have never had a "the appraiser is out of town" on a simple cookie cutter new construction property where the final inspection is to simply go to the property after completed, it's ALWAYS some weird older property that had some major issues and work that needed to be completed, NEVER something easy, that's been my experience anyway.

Only FHA final I did for someone else I could of walked to from my home and was just a minor item (although it is what FHA wants for its minimum standards).