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                                       FHA Announces Delayed Implementation:
                                      New Appraiser Independence Requirements
                                      Appraisal Update and/or Completion Report



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In a series of Mortgagee Letters, dated September 18, 2009, the U. S. Department of Housing and Urban Development (HUD) provided new guidelines, with an effective date of January 1, 2010, affecting the independence, portability, and validity periods of appraisals used in its Federal Housing Administration (FHA) program. On December 7, 2009, HUD issued the adoption of the Appraisal Update and/or Completion Report (Fannie Mae Form 1004D/Freddie Mac Form 442/March 2005), with an effective date of January 1, 2010.

On December 22, 2009, HUD announced a delay to the implementation date to February 15, 2010, with respect to Appraiser Independence (ML 09-28) and Appraisal Update and/or Completion Report (ML 09-51) to February 15, 2010.

Effective: February 15, 2010


Appraiser Independence (ML 09-28)

HUD provides clarification and reaffirmation of  FHA appraisal requirements related to appraiser independence and announces new requirements pertaining to entities that are eligible to order appraisals for FHA insured mortgages.

New Requirements
  • Prohibition of mortgage brokers and commission based lender staff from the appraisal process
  • Appraiser Selection in FHA Connection 
  • Appraisal and Appraisal Management Company (AMC)/Third Party Organization Fees
Affirming Existing Requirements
  • Prevention of Improper Influences on Appraisers
  • Appraiser Independence Safeguards
  • Appraiser Engagement - Knowledge of Market Area - Geographic Competency

Appraisal Update and/or Completion Report (ML 09-51)

New Requirement

This is a dual-purpose form:

Part A: Summary Appraisal Update Report, provides for updates of existing appraisals when the appraiser concurs with the original appraisal report and updates the appraisal by incorporating the original appraisal report.

Part B: Certification of Completion, provides for compliance repair and completion inspections for existing and new construction dwellings.


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The following Issuances are available in our Library:
  • Mortgagee Letter 09-28: Appraiser Independence
  • Mortgagee Letter 09-29: Appraisal Portability
  • Mortgagee Letter 09-30: Appraisal Validity Periods
  • Mortgagee Letter 09-51: Appraisal Update and/or Completion Report
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