FHA Revises Handbook on Appraisals
On October 6, 2016, NAR sent a letter to the Department of Housing and Urban Development (HUD) Secretary Julián Castro thanking him for listening to NAR’s concerns and revising the Single Family Housing Policy Handbook 4000.1 (the Handbook) appliance review requirements for FHA appraisals.
The update to the Handbook, released on September 30, 2016, removed the language that an appraiser “must operate all conveyed appliances and observe their performance,” and replaced it with “must note all appliances that remain and contribute to the market value.” FHA also provided a clear definition of which items are considered “appliances” for the purpose of an FHA appraisal. The update also includes additions related to residential Water Purification Systems and language regarding the Appraisal Effective Date.
NAR had previously sent a letter to FHA detailing concerns with the Handbook’s appraisal requirements and focused on this issue at the May 2016 NAR Real Property Valuation Forum in Washington, D.C.