Know Rob Frazier SRA FRICS Deputy Director Home Valuation Policy Division FHA Office of Single Family Housing FHA Priorities Expand Access to Credit Ensure LongTerm Viability of MMI Fund ID: 617625
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The New FHA Appraisal Manual: What You Need to KnowRob Frazier, SRA, FRICS, Deputy DirectorHome Valuation Policy Division, FHA Office of Single Family HousingSlide2
FHA Priorities
Expand Access to CreditEnsure Long-Term Viability of MMI FundTransform current guidance and processes
2Slide3
FHA Priorities
Transformation GoalsMake it easier to do business with FHAProvide better analysis and quality review Modernize to improve risk analysis
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Transformation
Programs -Valuation RelatedProvide Clear Guidance and Instructions
Replace 4150.2 and Mortgagee Letters
Update or Replace Old Manuals and RegulationsSlide5
Transformation
Programs -Valuation RelatedCreate Electronic Appraisal Storage and Analysis
Electronic Appraisal
Process
(
EAP)
Electronic Appraisal Delivery Portal (EAD
)
Adopt Industry Data and Format
Standards
Minimize Affect to AppraisersSlide6
New On-Line Handbook
Application Through EndorsementSlide7
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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.Slide8
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
Slide9
Servicing (under development for posting later this year)
REO & ClaimsTitle I
HECM (Reverse Mortgages)
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Sections
Still to Come Slide10
Components of Appraisal Guidance
Property RequirementsFHA requires underwriting of property condition as well as valuation.Observe, Analyze, ReportAppraisers’ requirements spelled out in one place, clearly
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Components of Appraisal Guidance
Report and Data Format RequirementsA separate section dealing with forms, data and formats required, “how to” instructionsFHA Appraiser Roster FHA Appraiser Compliance
6Slide12
Changes-Enhancements of Note
Zoning and Legal Non-Conforming UseStationary Storage Tanks Accessory Dwelling UnitsSlide13
Changes-Enhancements of Note
Attic and Crawl Space Inspection RequirementsGeneral Acceptance Criteria, Property Eligibility, Nonresidential Use of Property. Slide14
Changes-Enhancements of Note
Cost and Income Approach for Value Photograph Requirements Sales history of comps – 3 years+Slide15
Changes-Enhancements of Note
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 Slide16
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_requirementsSlide17
Electronic Appraisal ProcessingSlide18
FHA Appraisal Review ProcessSlide19
Appraisal Data and Valuation
Electronic Appraisal Delivery (EAD)Collects Forms and Data from LenderValidates identity of appraiser (future)Leverages
industry data
and report form standards
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Appraisal Data and Valuation
Runs FHA specific rules and scoringProvides data, PDF of report, results of scoringProvides First Generation Copy of Appraiser’s Work
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21
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)Slide22
22
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)Slide23
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MISMO 2.6 GSE (UAD) FormatFNM1004/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
PDFSlide24
EAD Unique Features
EAD Edits include 17 new (fatal) edits on 1004; 15 new edits on 1073 to align with FHA guidanceRequires a HUD Case NumberOn the appraisal form and in MISMO data Must be valid in CHUMSMust match subject address (auto-override allowed)
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EAD Unique Features
Appraiser ValidationMust be eligible on FHA appraiser rosterAppraiser certification state must match subject property stateSupervisory appraiser not allowedAppraiser Digital Signature (auto-override) –
phase 2
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Lender Options for Submission
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UCDP
LENDERS / SELLERS
EADSlide27
EAP System Components
EAD Web PortalEAP Components inside FHADocument Classification and StorageAppraisal DatabaseAppraisal 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 submittedFHA 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 processLender is still responsible for choosing a qualified appraiserLender is still responsible for underwriting the appraisal report
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Appraisal Data and Valuation
Collect appraisal data and formsElectronicallyearlier in the processintegrate into FHA processesUtilize data to enhance analytics
inform policy
i
nform Appraiser Roster quality
c
ontrol
8Slide31
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 You
For Further information:HUD.GOVAnswers@HUD.gov800-225-5342
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