How Long Is a Home Appraisal Good For?

A home appraisal provides a professional opinion of a property’s market value. This valuation is a critical component in most real estate transactions, particularly when a mortgage is involved, as it assures lenders the loan amount does not exceed the property’s actual worth. An appraisal establishes a property’s value at a specific point in time, but its validity for a transaction can vary significantly.

Typical Appraisal Validity Periods

The timeframe an appraisal is considered current depends on the type of loan and the lending institution’s guidelines. For conventional loans, appraisals are valid for 90 to 120 days. Some conventional loan appraisals on new construction might be valid for up to a year. Lenders have internal policies that dictate their acceptance period.

For loans intended for purchase by government-sponsored enterprises like Fannie Mae and Freddie Mac, appraisals are valid for up to 12 months, though an appraisal update is required if the original appraisal is older than 120 days. These entities set guidelines for many conventional mortgages, influencing how long lenders can rely on an appraisal report. The Federal Housing Administration (FHA) considers an appraisal valid for 180 days from its effective date. This period can be extended to up to one year with an appraisal update.

Veterans Affairs (VA) loans have an appraisal validity period of six months. This appraisal, known as a Notice of Value (NOV), is tied to the veteran borrower rather than the specific property. For USDA loans, appraisals are valid for 120 days with a potential 30-day grace period, extending the total validity to 150 days. These varying periods highlight that appraisal validity depends on the financing vehicle.

Key Factors Affecting Appraisal Validity

Several elements can influence how long a home appraisal remains relevant or cause its validity period to shorten. Market conditions are a key factor, as rapid shifts in local real estate values can render an appraisal outdated. In an unstable market with fluctuating prices, an appraisal may expire faster, sometimes in as little as 30 days, because lenders require the most current property valuation. Changes in interest rates, housing inventory, or local economic trends can impact demand and property values.

Changes to the property itself also play a role in appraisal validity. Major renovations, additions, or significant damage can alter a home’s value, requiring a new assessment. For instance, if a homeowner completes a major kitchen remodel, adds a bedroom, or experiences severe damage, the original appraisal may no longer accurately reflect the property’s current market value. Material changes to the property’s condition, size, or features can invalidate prior valuations.

Lender requirements are another key factor, as individual financial institutions or specific loan programs can have different policies regarding appraisal age. Even if general guidelines exist, a particular lender might impose a shorter acceptance window based on their risk assessment or underwriting standards. The purpose for which an appraisal is obtained also matters; an appraisal for a purchase transaction may have different validity considerations than one for a refinance, estate planning, or divorce settlement. An appraisal provides an opinion of value as of a specific effective date, and its suitability depends on whether that date still accurately reflects current market conditions for the intended use.

Scenarios Requiring a New Appraisal or Update

A new appraisal or an appraisal update is required when a real estate transaction experiences significant delays, extending beyond the initial validity period. For instance, if a home purchase takes longer than 90 to 120 days to close, the lender may request a new appraisal or an update. Similarly, if a borrower changes the type of loan, such as switching from a conventional mortgage to an FHA or VA loan, a new appraisal might be necessary to meet the new loan program’s specific requirements.

Choosing a different lender during the transaction can also require a new appraisal, as the new institution may not accept the previous lender’s report due to internal policies or a lack of direct relationship with the original appraiser. Material changes to the property after the initial appraisal, such as substantial renovations or significant damage, will necessitate a new valuation.

In situations of market volatility, lenders may require a new appraisal sooner to mitigate risk. An “appraisal update,” often completed using forms like Fannie Mae Form 1004D/Freddie Mac Form 442, can suffice if the original appraisal is still relatively recent. This update confirms that the property’s value has not declined since the original appraisal, often involving an exterior inspection and review of current market data. However, if market conditions have drastically changed or a new opinion of value is needed, a full new appraisal with a new effective date will be required.