FHA: Hope for Homeowners Means Hope for Appraisers
Editor's Note: The Housing and Economic Recovery Act of 2008 will mean business for FHA-approved appraisers, but according to appraiser and FHA course author Chuck Fisher, the business will only go to those able to meet the challenges.
FHA: Hope for Homeowners Means Hope for Appraisers
by Chuck Fisher, MBA, SRA
The immediate
opportunity for appraisers brought by the new legislation is increased business
volume- good news at a time when some appraisers are wondering how they will pay
the bills this winter.
According to the FHA Fact Sheet, the Hope for Homeowners program provides
eligibility to refinance into affordable FHA-insured loans to, "families trapped
in mortgages they currently cannot afford."
The program is expected to be
available October 1, 2008. While there are limitations, features of the program
include the opportunity to obtain a 30 year loan up to 90 percent of the
loan-to-value (LTV) ratio. There are no prepayment penalties and the maximum
mortgage amount is $555,440. The loans extinguish any subordinate liens and are
based on new home appraisals by FHA-approved appraisers.
The immediate challenge for appraisers is found in Sec. 1404 of the Hope for
Homeowners program, which provides
that: "Any appraiser chosen or approved to conduct appraisals for mortgages
under this title shall-
(A) be certified-
(i) by the state in which the property
to be appraised is located; or
(ii) by a nationally recognized professional appraisal organization; and
(B) have demonstrated verifiable
education in the appraisal requirements established by the Federal Housing
Administration under this subsection."
As of this writing,
FHA has not issued rules implementing the legislation. However, the intent is
clear- to create a pool of better-educated appraisers with specific knowledge of
FHA requirements, to complete FHA appraisal assignments.
FHA Ins and Outs
FHA has a stated
policy of making the Internet the primary means of disseminating information
about its requirements. It has a comprehensive website with many pages detailing
its requirements, as well as providing direct access to FHA publications,
documents and forms. Further, FHA has implemented the FHA Resource Center.
Finally, FHA has an automated distribution system via email of important
announcements and information important to appraisers and lenders.
One of the best places for information is www.hud.gov/groups/appraisers.cfm. At this website you will find many valuable links, including online training via webcasts.
(If you have E&O insurance through OREP and have not
registered yet for your free access, email for details
subscription@workingre.com.)