FHA appraisals don’t last forever. After all, an appraisal is a snapshot of the home’s market value and values change all of the time. So just how long is an FHA appraisal good for? Keep reading to find out.
How Long FHA Appraisals Last
Most time-sensitive supporting documents for FHA loans are good for 120 days or four months. This includes the FHA appraisal. This means if you don’t close on your loan before the 120-day expiration, your appraisal may not be any good. Without a valid appraisal, you can’t close on your FHA loan.
Fortunately, there’s an exception to the rule. If you need an extension, the lender can provide up to a 30-day extension period, but only if you meet one of the following requirements:
- You already have loan approval, but just have a few outstanding conditions before the appraisal expired
- You signed a sales contract prior to the appraisal’s expiration
This is at the lender’s discretion. Lenders aren’t obligated to provide the 30-day extension.
How to Extend an FHA Appraisal
If you need more than a 30-day extension, you’ll need an official appraisal update. The FHA states that the appraiser must update the appraisal before the expiration date of the original appraisal. In other words, the update must be done before the 120-day expiration.
The extension buys you an additional 120 days. In other words, you would have 240-days or 8 months to close your loan on the original FHA appraisal with the update.
Switching Lenders After the Appraisal
It happens from time to time – borrowers change lenders for one reason or another. Normally, it’s not an issue. If anything, it’s more of a headache for you since you have to start the process all over again. Where it gets sticky, though, is when you already had the appraisal done. Appraisers write the appraisal report in the lender’s name that ordered it. If you switched lenders, technically that appraisal is no longer valid.
Fortunately, there are a few things you can do:
- Request in writing that the lender release the appraisal to the new lender – The lender must comply within five days
- You must pay the original lender for the appraisal – If you don’t pay the lender, they aren’t obligated to transfer it out of their name
- The new lender must use the appraisal as is – There can’t be updates to the appraisal
The same expiration dates apply to the appraisal even if you switch lenders. Time is of the essence in this situation. If you switch lenders, make sure you do so with all of your paperwork ready and the ability to stay in touch with the loan officer available.
If you need to extend the appraisal, it may cost you a little more money because the appraiser must go out and re-evaluate the home. The update isn’t as costly as the original appraisal since it’s a quick update and not the original measurements all over again.
Make sure that your loan is ready to roll once you order the appraisal. If you are unsure about which lender to use, hold off until you make a final decision. You’ll reduce the paperwork madness and any delays that may occur as a result. Once you do pay for the appraisal, make sure all other aspects of your loan are ready to go so that you can close before it expires.