FHA Appraisal Finality
We had a borrower leave us for an online lender about a month ago. The online lender screwed up the loan, and the appraisal came in low (despite ample comps that supported value).
The borrower came back to us with 8 days left to close escrow, and we could have closed on time but for one problem: The low appraisal was an FHA appraisal (the borrower only qualified for FHA financing), and the online lender had uploaded the appraisal to “FHA Connection.”
Once an FHA appraisal is uploaded to FHA, that is the ONLY appraisal that can be used for that borrower and property for six months. We are certain we could have obtained an appraisal “at value” in the above situation, but it would have been in vain. Lenders must correlate to the original appraisal for six months.
Lessons Learned & Online Lender Pitfalls
Two lessons here: (1) don’t go to an online lender; and (2) FHA appraisals, once uploaded, cannot change.
