Is Converting FHA Appraisal To Conv Appraisal Really Necessary By The Lender?

[MMing5000]

I have just received a request to convert an FHA appraisal that was done 6 weeks ago to a Conventional appraisal, because the AMC said the Lender has switched the Borrower from an FHA loan to a conventional loan, and requests all FHA verbage to be removed and keep the original effective date.

i can understand when Lenders request upgrading a conventional appraisal toan FHA appraisal since FHA requires a higher level of inspection such as testing major appliances, checking attic space, checking foundation crawl space, etc.

Is it necessary for a Lender to ask the appraiser to downgrade an FHA appraisal by removing related FHA verbiage from the report when there were no adverse conditions noted? Doesn't the Lender understand that an FHA appraisal that meets FHA's minimum property requirements is more credible than a conventional appraisal where the same property may not meet FHA appraisal standars?

Are there anyone here with some underwriting knowledge who explain whether such conversion request is necessary or needed? I feel like asking them why do they need to convert the FHA appraisal to one that has a lower quality inspection?

 

[Mike Kennedy]

Intended Use and Intended User(s) change - appraisal scope, underwriting and appraisal requirements and verbiage change too.

 

[MMing5000]

Intended Use and Intended User(s) change - appraisal scope, underwriting and appraisal requirements and verbiage change too.

Since an FHA appraisal has to meet a higher standard of inspection when compared to an appraisal prepared for conventional loan purpose, what would be the adverse consequences if the Lender used an FHA appraisal to fund a conventional loan?

 

[Michigan CG]

Intended USER changed

 

[CANative]

Since an FHA appraisal has to meet a higher standard of inspection when compared to an appraisal prepared for conventional loan purpose, what would be the adverse consequences if the Lender used an FHA appraisal to fund a conventional loan?

You need to read up on intended use and user instead of questioning what your client needs. The "higher standard of inspection" is a misunderstanding on your part. It is a trivial factor compared to changing the intended user and the intended use of the appraisal.

PS... if you are no longer a trainee you should have admin change your license status.

 

[Jerry Bone Jr]

I have just received a request to convert an FHA appraisal that was done 6 weeks ago to a Conventional appraisal, because the AMC said the Lender has switched the Borrower from an FHA loan to a conventional loan, and requests all FHA verbage to be removed and keep the original effective date.
i can understand when Lenders request upgrading a conventional appraisal toan FHA appraisal since FHA requires a higher level of inspection such as testing major appliances, checking attic space, checking foundation crawl space, etc.
Is it necessary for a Lender to ask the appraiser to downgrade an FHA appraisal by removing related FHA verbiage from the report when there were no adverse conditions noted? Doesn't the Lender understand that an FHA appraisal that meets FHA's minimum property requirements is more credible than a conventional appraisal where the same property may not meet FHA appraisal standars?
Are there anyone here with some underwriting knowledge who explain whether such conversion request is necessary or needed? I feel like asking them why do they need to convert the FHA appraisal to one that has a lower quality inspection?

I'm sure you negotiated an acceptable fee to make this "conversion". How much was the first appraisal? Charge them that much again?

 

[JTip]

Easiest four bucks you can make in a couple hours (new inspection photos, scrub the clone, new dates).

 

[RSW]

The OP needs to read the 4000.1 handbook about reporting the intended user and the intended use. Both are different for a conventional loan as appraisal.

 

[Tom4value]

You cannot “switch” an appraisal from FHA to conventional. The clients changed. It is a new assignment. This means a new appraisal file. USPAP does not have a problem with keeping the effective date the same but the client may. Also, you will have to disclose that you performed an appraisal on the property within 3 years so if they want to get rid of FHA verbiage to not let anyone know that this not the original appraisal they are mistaken.

 

[Tim Hicks (Texas)]

The lender can do anything they want with that appraisal. If they can get the conventional loan done with an FHA appraisal that is fine. However, the moment they ask you to convert it to a conventional appraisal it becomes a new assignment with all that entails. Charge accordingly for the necessary changes.