FHA’s Rule Change of a Three Year Sales History on Comps – What about the recent past?

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The 3-year reporting requirement for comp sales had only been in effect for less than 2 months and was the topic of much discussion at the various industry webinars and conferences conducted by HUD/FHA staff prior to the September 14, 2015, implementation date.

In my blog post from Nov. 6th, I discussed FHA’s recent decision to rescind its short-lived policy to require appraisers to report the date(s) and sales price(s), that occurred within three years of the effective date of the appraisal, for each comparable sale.

FHA’s policy going forward will be for appraisers to report on a one-year sales history on the comparable sales (which has been the industry standard and FHA’s previous policy).

See previous HUD Announcement (FHA Info Bulletin #15-24) regarding this policy.

In an updated version of FHA’s Single Family Housing Appraisal Report and Data Delivery Guide that was published on November 5, 2015, it is indicated that appraisers will now only have to report on a one-year sales history on the comparable sales.

The million dollar question at this time is “will HUD/FHA expect underwriters & QC auditors to enforce the 3-year sales history requirement for comp sales on appraisals performed on transactions obtaining their FHA case numbers between 9/14/15 and 11/5/15”?

HUD needs to provide something in writing to the industry that will make it very clear what their expectations are for appraisals processed in this interim period.

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You are encouraged to keep reading LoanLogics Blog Posts and Newsletters to stay current on HUD/VA/Fannie Mae, etc. policy changes.

For those of you that want to obtain something in writing relative to this recent FHA policy change, the SF Housing Appraisal Report & Data Delivery Guide can be accessed at the link below (refer to page #35): http://portal.hud.gov/hudportal/documents/huddoc?id=SFH_POLI_APPR_RPT_FIN.PDF­­­­­­­­­­­­­­­­­.

About the Author

Gerry Glavey

Gerard (Gerry) Glavey is Senior Vice President / Chief Credit Officer for LoanLogics. Gerry has decades of experience working in residential mortgage credit and compliance and brings insights that few in the industry can match. In his role, he develops new services and provides support for all post close quality control and quality assurance, pre-close quality control, due diligence services, and document processing services. He spent 37 years with the US Department of Housing and Urban Development, where most recently he was the Director, Processing and Underwriting Division for the Home Ownership Center (HOC) in Philadelphia. In this capacity, Mr. Glavey was responsible for the administration of all HUD/FHA Single Family Loan Origination activities, including underwriting, appraisal and endorsement for the 16 state jurisdiction of this HOC.