HUD Issues September 2016 Revisions to Handbook 4000.1

Posted by: Dan Bradley Date: Oct 4, 2016 12:00:00 PM

The most recent revisions to Handbook 4000.1, issued by HUD on September 30, 2016, address three topics of importance to appraisers.

  1. Appliances
  2. Effective date
  3. Individual water purification systems

We covered the issue of appliances in a previous article. In this article, we will address the other two issues: effective date and water purification systems.

Section II D 1 A of the Handbook states that the effective date of the FHA appraisal cannot be prior to the FHA case number assignment date unless “the Mortgagee certifies that the appraisal was ordered for conventional lending or government-guaranteed loan purposes and was performed pursuant to FHA guidelines.” The Handbook further states that if the previous appraisal was completed for a conventional or government-guaranteed loan, the FHA appraisal request is considered a new assignment. The appraisal report must indicate that the intended use is “solely to assist FHA in assessing the risk of the Property securing the FHA-insured Mortgage.” FHA and the mortgagee (lender) must be indicated as the intended users of the appraisal report.

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Topics: fha

HUD Clarifies Appliance Requirement in Handbook 4000.1

Posted by: Dan Bradley Date: Oct 3, 2016 11:00:34 AM

HUD made good on its promise to issue revised guidance on how appraisers should handle appliances in FHA appraisals. The latest revisions to HUD Handbook 4000.1, issued September 30, 2016, provide some clarity about appliances.

First, the Handbook now states specifically what is considered an appliance. The list includes “refrigerators, ranges/ovens, dishwashers, disposals, microwaves, and washers/dryers.” This definition was previously unclear; some appraisers had thought “appliances” could include spas, trash compactors, sound systems, intercoms, security systems, automatic garage door openers, etc.

Second, the Handbook now clarifies when appliances are required to be operational. The revised Handbook states, “Appliances that are to remain and that contribute to the market value opinion must be operational.” The Handbook goes on to state, “The Appraiser must note all appliances that remain and contribute to the Market Value.”

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Topics: fha

HUD to Make Changes to Appliance Language in Handbook 4000.1

Posted by: Dan Bradley Date: Jul 29, 2016 3:42:43 PM

At a July 2016 meeting of regulators and appraisal professionals hosted by the National Association of Realtors (NAR), a HUD representative stated that the language in Handbook 4000.1 regarding appliances is going to be revised on or around September of 2016. The HUD representative stated that the exact language of the revision was still being worked on, and that it would be a clarification of the existing requirement. The current language in the Handbook states, “The Appraiser must note appliances present in the house at the time of observation and indicate whether that appliance is considered Personal Property or Real Property. The Appraiser must operate all conveyed appliances and observe their performance. The Appraiser must notify the Mortgagee of the deficiency of MPR or MPS if any conveyed appliances are inoperable.”

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Topics: fha, HUD

FHA Crawl Space and Attic Guidelines: Answers to Common Questions

Posted by: Dan Bradley Date: Jan 28, 2016 11:16:08 AM

Are you up to speed on the latest FHA appraisal requirements related to attics and crawl spaces? In this article, McKissock instructor and author of The NEW FHA Handbook 4000.1 course, Dan Bradley, responds to your questions regarding the changes to HUD’s latest version of the Single Family Housing Policy Handbook. Specifically, he answers some of the most common questions related to FHA crawl space and attic guidelines.

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Topics: fha

FHA Appliance Guidelines: Answers to Common Questions

Posted by: Dan Bradley Date: Jan 7, 2016 1:24:01 PM

Are you up to speed on the latest FHA appraisal requirements related to home appliances? In this article, McKissock instructor and author of The NEW FHA Handbook 4000.1 course, Dan Bradley, responds to your questions regarding the changes to HUD’s latest version of the Single Family Housing Policy Handbook. Specifically, he answers some of the most common questions related to FHA appliance guidelines.

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Topics: fha

FHA Rescinds Requirement for 3-year Sales History of Comparables for Appraisals

Posted by: Dan Bradley Date: Nov 6, 2015 3:20:47 PM

On November 5, FHA issued an announcement of revisions to its Single Family Housing Appraisal Report and Data Delivery Guide (ARDDG).

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Topics: fha

A Boom in FHA Buyers Means Big Opportunities for FHA Appraisers

Posted by: Alexis Petersen Date: Sep 25, 2015 10:33:50 AM

It’s anticipated that 2.2 million boomerang buyers—those homeowners who are officially recovering from foreclosures, short sales or loan modifications—will re-enter the market over the next five years, according to TransUnion.

The influx of boomerang buyers, coupled with an increase in first-time buyers, has led to an uptick in FHA loans. In fact, just this July, the real estate market saw the highest share of FHA buyers since 2013, according to RealtyTrac.

A full 23% of single-family homes and condos were purchased by FHA buyers in Q2 of 2015, up from 20% in Q1 of 2015 and 19% in Q2 of 2014. FHA loans make it possible for boomerang buyers and first-time buyers, who are more likely to have lower down payments or credit scores, to purchase homes.

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Topics: fha