FHA Changes Challenge Appraisers

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FHA Appraisal Challengens
FHA Appraisal challenges

FHA has made life more nerve-wracking for an FHA appraiser.  After polling a handful of FHA licensed appraisers on their take on FHA”s changes the responses ranged from pure hatred to slight discomfort with FHA’s appraisal changes.

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What Are FHA Appraisers Saying About the Changes?

Each appraiser has a different understanding of the changes.  As a result, they each have a varying level of tolerance and acceptance for them.  Regardless, we learned one universal fact – the appraisal community is not excited about the changes.  On one end of the spectrum is the appraiser who is on the verge of changing careers.  To be fair and to understand this severe position, remember what appraisers have been through over the past several years.

The majority of the appraiser population is generally frustrated by a sharp increase in two results of the FHA appraisal changes.

  • First – the increase in time it will take to complete a report
  • Second – the increase in liability on the FHA appraiser.

Both of these outcomes can have a ripple effect down to the consumer and mortgage lender.  Most notably:

  • A possible increase in the cost of an FHA appraisal costs due to appraisers having to do more work
  • Appraisers may include less comparable sales due to the time it takes to meet all other added requirements
  • Longer completion times for FHA appraisals
  • Appraisers choosing to complete Conventional appraisals prior to any FHA appraisal orders on their desk
  • Change in valuation quality due to appraisers being under an even larger microscope

Each of the above concerns were weaved in and out of the different responses from the FHA appraisers I spoke with to one extent or another.  As with any changes, time will tell.

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By Jeremy House

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