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Request to change USDA appraisal to FHA

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Happy Val

Thread Starter
Sophomore Member
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Oct 30, 2008
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Certified Residential Appraiser
State
Oregon
So I am pretty well versed on the protocall to take when asked if a conventional loan appraisal be changed to an FHA. Is it the same with USDA? I am assuming so, and I know I will be ask tomorrow, so I want to make sure. Typically I explain that it cannot be done due to the FHA case number has to preceed the inspection date, therefore a new effective date would have to be established and my job starts all over again. The USDA ED was about 2 months ago. Same lender, buyer, sales price, etc., just new loan. The property got hung up on having a guest cottage which USDA would not accept.
 

residentialguy

Elite Member
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Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
So I am pretty well versed on the protocall to take when asked if a conventional loan appraisal be changed to an FHA. Is it the same with USDA? I am assuming so, and I know I will be ask tomorrow, so I want to make sure. Typically I explain that it cannot be done due to the FHA case number has to preceed the inspection date, therefore a new effective date would have to be established and my job starts all over again. The USDA ED was about 2 months ago. Same lender, buyer, sales price, etc., just new loan. The property got hung up on having a guest cottage which USDA would not accept.
That's not correct with FHA. If the lender goes through the right channels, they can convert to FHA and use that prior appraisal inspection as long as FHA inspection min standards were met. You would still treat it as a new appraisal in that you have a new file number and FHA case number, and new intended user (FHA) and SOW to include the FHA requirements, but you can use prior inspection and effective date (along with most of your appraisal). How much you want to charge, if any, is a personal business decision.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
Here's FHA's take on it. http://tinyurl.com/bsluxsb

The effective date of the appraisal cannot be before the case number
assignment date unless the lender certifies, via the certification field in the
Appraiser Logging Screen in FHA Connection, the appraisal was ordered for
conventional lending, HUD REO or government guaranteed loan purposes
but was performed by a FHA Roster Appraiser and is being converted to a
FHA-insured mortgage. The mortgagee must retain documentation in the
case binder substantiating conversion of the mortgage to FHA.
 

RSW

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Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Good response, Resguy!
 

EddieB

Senior Member
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Feb 17, 2005
Professional Status
Certified Residential Appraiser
State
North Carolina
The oar effective date was two months ago. Another decision should address that.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
The oar effective date was two months ago. Another decision should address that.
Good point. But , while that may be a factor for the lender, that's a lender issue, not OP's problem.
 

EddieB

Senior Member
Joined
Feb 17, 2005
Professional Status
Certified Residential Appraiser
State
North Carolina
Good point. But , while that may be a factor for the lender, that's a lender issue, not OP's problem.
True that. The inspection protocol for FHA vs. USDA is the same and wouldn't require a re inspection. The appraisal validity for FHA is 120 days but that also is a lender issue.
 

Mike Garrett RAA

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Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Thats my thought too...same protocol. Give the HOC a call and verify it's OK.
 

Happy Val

Thread Starter
Sophomore Member
Joined
Oct 30, 2008
Professional Status
Certified Residential Appraiser
State
Oregon
So, I read all your responses and felt good about the change. Then they tell me, its a new LENDER now too as well as adding the mother of the borrower to the deal. So I have told them I can't change the Lender or borrower's name on the appraisal (even with a letter from the original lender), but I can attach an adddendum to the converted appraisal to address the other changes. Or am I wrong? Since FHA has ok'd the change from USDA to FHA, can I now make other changes? I believe changes to the key players is a USPAP issue and would be mis leading due to not being valid per effective date. However, the deal was USDA per effective date and I am allowed to chang it. So confused. Let me know your thoughts.
 

EddieB

Senior Member
Joined
Feb 17, 2005
Professional Status
Certified Residential Appraiser
State
North Carolina
Don't let your client make you over think this. Things have changed since the effective date of the appraisal. New assignment. Your intuitions are correct.
 
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