How Long Is a Home Appraisal Good For?

A home appraisal provides an independent estimate of a property’s market value. This valuation is a snapshot of the property’s worth at a specific point in time, reflecting market conditions and characteristics on the inspection date. Appraisals are commonly required in real estate transactions, especially for mortgage financing, as they help lenders determine the appropriate loan amount. Understanding how long an appraisal remains relevant is important for anyone involved in real estate transactions.

Standard Validity for Mortgage Appraisals

For conventional mortgage loans, a home appraisal is generally considered valid for 90 to 120 days from the effective date of the appraisal report. This timeframe is largely influenced by guidelines set by government-sponsored enterprises like Fannie Mae and Freddie Mac, which purchase and securitize a significant portion of conventional mortgages. Lenders typically adhere to these guidelines to ensure originated loans are eligible for sale in the secondary market. Fannie Mae generally considers appraisals valid for up to 12 months, but an update is required if the report is more than 120 days old.

Government-backed loans, such as those from the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA), have specific guidelines for appraisal validity. FHA appraisals are typically valid for 180 days from the effective date of the appraisal report.

VA loan appraisals are generally valid for 180 days. If a VA loan does not close within this 180-day period, a new appraisal might be required. These validity periods help ensure the property’s assessed value remains current throughout the underwriting and closing process.

The validity period begins from the date the appraisal report is completed and signed by the appraiser, not from the date the loan application is submitted or the closing date. Market conditions can shift quickly, so lenders rely on the appraisal to confirm the property’s value is sufficient to secure the loan. An outdated appraisal may not accurately reflect current market realities.

Circumstances That Impact Validity

Even within standard validity periods, several factors can cause an appraisal to become outdated or necessitate a new valuation. Rapid changes in local real estate market conditions can significantly impact an appraisal’s relevance. In a volatile market where property values are rising or falling quickly, an appraisal from just a few months prior may no longer accurately reflect the current market value. Lenders may require a newer appraisal sooner in dynamic environments to mitigate risk.

Significant changes to the property itself after the appraisal date can invalidate the original assessment. If the property sustains damage, undergoes major renovations, or has substantial additions, its characteristics will have changed. An appraiser’s original valuation would not account for these alterations, making a new appraisal necessary to reflect the property’s updated condition and features.

Individual lenders may have stricter internal policies that affect appraisal acceptance. While general guidelines exist from Fannie Mae, Freddie Mac, FHA, and VA, a specific lender might impose a shorter acceptance period for appraisals based on their risk assessment or portfolio management strategies. An appraisal technically within agency guidelines might still be deemed too old by a particular financial institution.

The original purpose for which the appraisal was obtained plays a role in its ongoing relevance. An appraisal conducted for a purchase transaction might not be considered current or appropriate for a subsequent refinance application, even if within a general timeframe. Each lending scenario has specific requirements, and the value estimate’s relevance is tied to its intended use.

Extending or Updating Appraisals

When an appraisal’s initial validity period is nearing its end or has passed, two main options exist to update a property’s value for lending purposes: an appraisal update or a re-certification of value. An appraisal update, often performed using Fannie Mae Form 1004D or Freddie Mac Form 442, allows the original appraiser to review the property and market data to determine if the value has changed since the original report. This usually involves the appraiser inspecting the property’s exterior and analyzing current market conditions; a new interior inspection is not always required. If the appraiser indicates the value has declined, a new appraisal is needed.

A re-certification of value, often confused with an appraisal update, serves a different purpose. It is used to confirm that conditions stipulated in the original appraisal, such as completed repairs or construction, have been met. This process does not change the original value opinion’s effective date but certifies the property now meets the conditions under which the original valuation was made.

A new appraisal becomes necessary under several circumstances. This includes situations where significant time has passed beyond the acceptable update period, major market shifts have occurred, or substantial physical changes have been made to the property. If a different lender is involved or loan program requirements differ significantly from the original transaction, a new appraisal will likely be mandated.

The process for obtaining an update or a new appraisal begins with the lender. For an appraisal update, the original appraiser is preferred, though a substitute appraiser may be used if the original one is unavailable. An appraisal update costs less than a full new appraisal, ranging from $75 to $200, as it requires less extensive work. A full new appraisal, involving a complete inspection and report, can cost several hundred dollars, between $400 and $700, depending on the property’s complexity and location.