FHA Appraisal Transfer and FHA Appraisal Recertification
There are rules for an FHA appraisal transfer and a FHA appraisal recertification. Borrowers may want to switch mortgage companies and wonder how they can transfer a FHA appraisal. In some cases, borrowers are fed up with the loan process when the mortgage company takes too long, which can lead to an appraisal expiration. Other cases borrowers find out that the Loan Originator was not aware of an overlay
and resulted in a last minute denial. The Loan Originator did not do his due diligence during the pre-approval process
and issued a pre-approval not being aware of the internal company guideline.
FHA Appraisal Transfer: Borrower Switching Lenders
Borrowers that want to switch mortgage companies must request to transfer the case to the second lender. The lender with the case must transfer the case
to the second lender.
- Step One: Transfer the FHA Case Number, which is explained later in this article.
- Step Two: Ask for a copy of the appraisal from the current lender.
- FHA guidelines state that the mortgagee must transfer the appraisal to the second mortgagee within five business days.
- The lender that has the appraisal is not required to transfer the appraisal until they are reimbursed – if the original lender has not been reimbursed for the cost.
FHA Appraisal Recertification – Update FHA Appraisal
- The date in which the property was inspected by the appraiser is considered the effective date.
- It is important to make sure the FHA case number is not near the expiration date when transferring a case number because this could result in a re-inspection.
- Updated FHA appraisals may only be acceptable under the following circumstances:
- The same appraiser who performed the original report.
- No decline in value.
- Any improvement the property that contributes to the value of the property, must be observed from the street or public way;
- Property reveals no deficiencies when doing an exterior inspection.
- The update must be done before the 120 day expiration; and
- The appraisal report has not been previously updated.
FHA Case Numbers: How to Transfer From One Lender to Another
- In order for another lender to work on a loan that a previous lender has been working on, the FHA case number must be transferred.
- A Loan Originator can ask the new lender to do a case query on FHA Connection in order to figure out what the current FHA case number is.
- In some cases, the current lender with the case number will ask for aborrower’s authorization and letter of explanation that is signed and dated.
An example of a letter of explanation to send to the current lender to transfer the case number: