fha office of single family housing the new fha appraisal manual: what you need to know rob frazier,...

FHA Office of Single Family Housing

The New FHA Appraisal Manual: What You Need to Know

Rob Frazier, SRA, FRICS, Deputy DirectorHome Valuation Policy Division, FHA Office of Single Family Housing


FHA Priorities

• Expand Access to Credit• Ensure Long-Term Viability of MMI Fund• Transform current guidance and

processes

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FHA Priorities• Transformation Goals

– Make it easier to do business with FHA– Provide better analysis and quality review – Modernize to improve risk analysis

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Transformation Programs -Valuation Related

•Provide Clear Guidance and Instructions•Replace 4150.2 and Mortgagee Letters•Update or Replace Old Manuals and Regulations


Transformation Programs -Valuation Related

•Create Electronic Appraisal Storage and Analysis

–Electronic Appraisal Process (EAP)–Electronic Appraisal Delivery Portal (EAD)–Adopt Industry Data and Format Standards–Minimize Affect to Appraisers


New On-Line Handbook Application Through

Endorsement


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New SF Housing Policy Handbook

Provide stakeholders with a consistent, authoritative source for Single Family policy:

• Transition from multiple Handbooks, Mortgagee Letters, and other guidance to a single policy guide.

Application through Endorsement status:• Finalizing for publication this summer, with significant

lead time before effective date.


• Posting for feedback this summer, with future, aligned effective dates: Appraiser 203(k) Condominiums

To be part of, and used in concert with, future published version of Application through Endorsement section.

• Also posting this summer: Doing Business with FHA section Quality Control, Oversight and Compliance section 8

New SF Housing Policy Handbook


• Servicing (under development for posting later this year)

• REO & Claims• Title I• HECM (Reverse Mortgages)

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Sections Still to Come


Components of Appraisal Guidance

• Property Requirements– FHA requires underwriting of property condition

as well as valuation.• Observe, Analyze, Report

– Appraisers’ requirements spelled out in one place, clearly

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Components of Appraisal Guidance

• Report and Data Format Requirements– A separate section dealing with forms, data and

formats required, “how to” instructions• FHA Appraiser Roster • FHA Appraiser Compliance

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Changes-Enhancements of Note

• Zoning and Legal Non-Conforming Use

• Stationary Storage Tanks

• Accessory Dwelling Units



• Attic and Crawl Space Inspection Requirements

• General Acceptance Criteria, Property Eligibility, Nonresidential Use of Property.



• Cost and Income Approach for Value • Photograph Requirements

• Sales history of comps – 3 years+



• Measurement and Reporting of Contributory Value of energy efficiency components or alternate systems (solar, etc.).

• Market Conditions Addendum to the Appraisal Report, Fannie Mae Form 1004MC


LOCATION OF DRAFT POLICY• Draft Posted Friday, July 31 at:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/SFH_policy_drafts/appraiser_requirements






Electronic Appraisal Processing


HOC or HQ Reviewer

needs to view appraisal

report

Reviewer opens FHA website to retrieve report

PDF file is viewable on

reviewer’s deskop

Review process proceeds to its

conclusion

Elapsed time, less than one minute if File in Database, otherwise, 1 day to receive from Appraiser

HOC or HQ Reviewer

needs to view appraisal

report

Request is sent to record storage to

send file to Reviewer

Original Paper File is delivered to

Reviewer’s Desktop

Review process proceeds to its

conclusion

Elapsed time, 3 weeks or longer

Current Process

Proposed Process

FHA Appraisal Review Process


Appraisal Data and Valuation• Electronic Appraisal Delivery (EAD)

• Collects Forms and Data from Lender

• Validates identity of appraiser (future)

• Leverages industry data and report form standards

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Appraisal Data and Valuation• Runs FHA specific rules and scoring

• Provides data, PDF of report, results of scoring

• Provides First Generation Copy of Appraiser’s Work

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• EAP will: Use EAD portal to collect scored reports

from Vendor

Enable lenders to upload and allow HOCs to use electronic files when needed

Electronic Appraisal Process (EAP)


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• EAP will: Move documents and data through FHA

Systems Filename is FHA Case Number with

versioning functions FHA staff members will view the appraiser’s

original PDF

Electronic Appraisal Process (EAP)


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MISMO 2.6 GSE (UAD) Format• FNM1004/FRE70 Single Family Appraisal Report• FNM1073/FRE465 Condominium Unit Appraisal Report

MISMO 2.6 Errata Format• FNM1004C/FRE70B Manufactured Home Appraisal

Report• FNM1025/FRE72 2-4 Family Appraisal Report• FNM1004D/442 Update of Appraisal• FNM1004D/442 Completion Report

MISMO 2.6 Format with embedded PDF


EAD Unique Features

• EAD Edits include 17 new (fatal) edits on 1004; 15 new edits on 1073 to align with FHA guidance

• Requires a HUD Case Number– On the appraisal form and in MISMO data – Must be valid in CHUMS– Must match subject address (auto-override

allowed)

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EAD Unique Features

• Appraiser Validation– Must be eligible on FHA appraiser roster– Appraiser certification state must match

subject property state– Supervisory appraiser not allowed

• Appraiser Digital Signature (auto-override) – phase 2

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Lender Options for Submission

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UCDP

LENDERS / SELLERS

EAD


EAP System Components• EAD Web Portal• EAP Components inside FHA• Document Classification and Storage• Appraisal Database• Appraisal Scoring Database• Integration of the Databases with

Endorsement Platform

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“Lender Hard Stops”• Hard Stops are the Fannie Mae / Freddie Mac

name for Errors in appraisal data submitted

• FHA has adopted the “base line” and has added a few of its own.

• To be published on the FHA website

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“Lender Hard Stops”• FHA is concentrating on data errors that would

cause a failure in the upload and matching process

• Lender is still responsible for choosing a qualified appraiser

• Lender is still responsible for underwriting the appraisal report

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Appraisal Data and Valuation• Collect appraisal data and forms

– Electronically– earlier in the process– integrate into FHA processes

• Utilize data to – enhance analytics – inform policy– inform Appraiser Roster quality control

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Appraisal Data and Valuation• Leverage industry data standards, systems,

and processes where possible.• Provide useful feedback messages aligned

with FHA policy.• Provide process efficiencies for lenders by

seeding the endorsement screens with EAD data.

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Thank YouFor Further information:

[email protected]

800-225-5342

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mailto:[email protected]

fha office of single family housing the new fha appraisal manual: what you need to know rob frazier,...

Documents

single family policy

endorsement slide

new fha appraisal manual

single policy guide

fha section quality

electronic appraisal

endorsement section

data format requirements