Revised FHA Appraisal Guidelines in Effect for Appraisals Done After April 1, 2009

The federal guidelines that outline 10 things that appraisers must do or provide for all FHA appraisals done after April 1, 2009 are as follows:

1. The Market Conditions Addendum (Fannie Form 1004MC/Freddie Form 71).
2. At least 2 comparable sales within 90 days of appraisal date.
3. A minimum of 2 active listings or pending sales in addition to the 3 closed comparables.
4. Bracketed listings using both dwelling size and sales price when possible.
5. Adjust active listings to reflect the List To Sales Price Ratio.
6. Adjust pending sales to reflect contract sales price when possible.
7. Include original list price and any revised list prices.
8. Reconciliation of adjusted values of active or pending sales with adjusted values of closed comparable sales.
9. Absorption Rate Analysis.
10. Known or reported sales concessions on active and pending sales.

Don't feel bad if you do not understand the above criteria. Your lender and your Realtor should if they know what they are doing, and can help explain it...

FHA is becoming more strict on the actual value of the home that one may buy and fund through them. In today's market, FHA loans are competitive to conventional loans and do not require the minimum of 10% that a conventional loan requires.