Where is the HUD 2 comps within 90 days requirement in 4000.1

[alebrewer]

Here is where to find it in the 4000.1

II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
D. Appraiser and Property Requirements for Title II Forward and Reverse Mortgages
4. Valuation and Reporting Protocols
(F) FHA Appraisal Requirements in Changing Markets
(2) Required Analysis and Reporting

"The Appraiser must include an absorption rate analysis, and at least two comparable sales that closed within 90 Days prior to the effective date of the appraisal. If the Appraiser cannot comply with this requirement due to the lack of market data, a detailed explanation is required."

Also:
"The Appraiser must include a minimum of two active listings or pending sales on the SCA Grid (in addition to at least three recently settled sales)."

The 90 days and 2 active listings are for changing markets, no? Also - the two listings requirement has been temporarily waived by FHA I believe...

 

[ramrcdk]

Here is where to find it in the 4000.1

II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
D. Appraiser and Property Requirements for Title II Forward and Reverse Mortgages
4. Valuation and Reporting Protocols
(F) FHA Appraisal Requirements in Changing Markets
(2) Required Analysis and Reporting

"The Appraiser must include an absorption rate analysis, and at least two comparable sales that closed within 90 Days prior to the effective date of the appraisal. If the Appraiser cannot comply with this requirement due to the lack of market data, a detailed explanation is required."

Also:
"The Appraiser must include a minimum of two active listings or pending sales (NOT UNTIL WAIVER EXPIRATION) on the SCA Grid (in addition to at least three recently settled sales)."

READ POST #7.
FHA-HUD Waiver: ACTIVE & PENDING do NOT need to be provided until expiry of the waiver.
Copy Paste the Notification including THE reason' why" IN the Report because: the Lender-AMC-Client
likely are NOT aware of the waiver.
So far, with the above, I have not had any rebuttal via lender.

 

[imjiminnh]

Thanks Ram. In a rural market like NH requiring 2 sales within 90 days would mean including less similar sales than in the 3-6 month period sometimes. I threw in an explanation of why I opted to use 3 sales in the 3-6 month period and only 1 in the last 3 months (from a pool of 9 similar sales in the last year), and added a disclosure that using less similar additional sales in the under 90 day period would alter my opinion of value and render it to be a non market value based on lender criteria. I'm guessing that will stop the nonsense.

 

[djd09]

how many comp sales does USPAP require?

 

[imjiminnh]

DJ,

An adequate number of sales needed to develop a reliable opinion of value, not a particular number. In this case the issue is not the # of sales, but FHA's requirement to use 2 sales within the 90 day period in a changing market. If it affects the value opinion as a result, they leave the option of not complying with the requirement by commentary as to why it wasn't done. I can tell you that after justifying my not doing so in response to the lenders revision request, I have not heard a word back from the lender or the DEU. If they should push back, I will disclose that adding additional sales solely based on their sales date will result in the development of a non market value predicated on the lenders directive. This will render the appraisal unusable for lending purposes and I guarantee they will walk back the revision request.

I've used that statement successfully when I get ridiculous requests to add additional sales from over 12 months or from other markets in order to bracket the subjects 2 decks or basement family room.

 

[sputnam]

Right. USPAP does not specify how many comparables an appraiser has to include in Sales Comparison Analysis. My personal rule is that all of the relevant sales get considered and as many as are needed to adequately tell the story are included in the report. On the other hand, your Client may go nuts if you submit a Sales Comparison Approach that only reports one sale. If they do, it's a Lender guideline, not a USPAP issue.

 

[Wm. Hattaway]

FHA Issues Temporary Partial Waiver of Appraisal Requirements in Changing Markets
Today, the Federal Housing Administration (FHA) issued a Temporary Partial Waiver to parts of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), Section II.D.4.c.iii.(F)(2): FHA Appraisal Requirements in Changing Markets – Required Analysis and Reporting. This partial waiver addresses difficulty in changing markets with increasing property values and a shortage of housing supply.
To address this, FHA is issuing this temporary partial waiver of the Handbook 4000.1 requirement in Section II.D.4.c.iii.(F)(2) that the appraiser must include, analyze, and report a minimum of two active listings or pending sales on the appraisal grid. This temporary partial waiver of established policy will help ensure the continued availability of affordable housing in these markets.
FHA roster appraisers must continue to comply with Handbook 4000.1 requirements for comparable selection, adjustments, and inclusion of proper data collection and reporting of market conditions on Fannie Mae Form 1004MC/Freddie Mac Form 71.
This temporary partial waiver is effective for the 12-month period between April 26, 2021, and April 26, 2022.