The Federal Housing Administration announced late Monday that it is extending its relaxed appraisal requirements for most FHA-insured loans originated during the COVID-19 coronavirus national emergency. The extension, announced in Mortgagee Letter 2020-20 runs through August 31. Previously, the allowance for desktop and curbside appraisals was in place through May 17, per ML 2020-05 published in late March, and was extended through June 30 with ML 2020-14.
The extension applies to the allowance of desktop-only and exterior-only appraisals as well as re-verification of employment guidance specified by FHA in the original March ML, and applies to all FHA Single Family Title II forward and reverse mortgage programs. This extension will further allow for those seeking and conducting property appraisals to practice social distancing while allowing a necessary step in the mortgage process to proceed.
“This second extension will allow industry partners additional opportunity to utilize flexible guidance related to reverification of employment and appraisal protocol for FHA Single Family Programs affected by COVID-19,” the ML reads.
The extension is effective immediately as of the ML’s publication, coming in just days before the first extension was set to expire.
“Today’s ML extends for the second time the flexible alternatives for industry partners that must re-verify a borrower’s employment and/or conduct appraisal reviews while observing prudent physically-distancing practices associated with COVID-19,” HUD said in an informational notice announcing the extension. “As outlined, FHA’s extension of the re-verification of employment guidance is effective immediately for cases closed on or before August 31, 2020. It is also effective immediately for appraisal inspections completed on or before August 31, 2020.”
Read Mortgagee Letter 2020-20 at HUD.