Washington Report

Advocacy Updates from Washington D.C.

FHA Requiring Second Appraisal for HECMs

On September 28, 2018, the Federal Housing Administration (FHA) released Mortgagee Letter 2018-06 which requires a second appraisal for certain Home Equity Conversion Mortgages (HECM). Given the recent volatility in the HECM program and it's disproportionate effect on the Mutual Mortgage Insurance Fund, FHA has decided to require that higher risk HECMs undertake a second appraisal to ensure credibility in assessing the collateral risk. In situations where there is a second appraisal, the lower value appraisal is to be used in originating the loan. The Mortgagee Letter is effective for all HECMs originated between October 1, 2018 until September 30, 2019.

Download Mortgagee Letter 2018-06

Advertisement