How Long Is an FHA Appraisal Good For?

An FHA appraisal is a required step for obtaining a mortgage insured by the Federal Housing Administration. This assessment serves two primary purposes: determining the property’s market value and ensuring it meets specific FHA minimum property standards for safety, security, and soundness. The appraisal is performed by an FHA-approved appraiser, who acts as an independent third party to provide an unbiased evaluation. The duration for which this appraisal remains valid plays a significant role in the overall mortgage loan process and closing timeline.

Standard Appraisal Validity

An FHA appraisal is valid for 180 days from its effective date. The effective date refers to the day the FHA-approved appraiser physically inspected the property. This established validity period exists to account for potential fluctuations in the real estate market and any changes in the property’s condition over time. This period helps ensure that the property’s assessed value and compliance with FHA standards remain current and relevant to the loan transaction.

Appraisal Extensions and New Appraisals

When an FHA appraisal approaches its expiration, or has already expired, specific procedures govern its continued use. The Federal Housing Administration extended the initial appraisal validity period to 180 days and the appraisal update validity period to one year. An appraisal can be extended through an “appraisal update” or “re-certification,” which can make the appraisal valid for up to one year from the effective date of the initial appraisal. This update is performed by the original appraiser. During this process, the appraiser conducts an exterior inspection of the property and reviews current market data to confirm that the property’s value has not declined.

A new appraisal becomes necessary under several conditions. If the appraisal update reveals a decline in the property’s value, a completely new appraisal is required. If there are “material deficiencies” in the initial appraisal, such as errors or inconsistencies, the lender may order a second appraisal. A new appraisal may also be needed if the FHA case number assigned to the loan changes, or if the original appraisal cannot be transferred to a new lender. Once a loan has successfully closed, the appraisal used for that transaction cannot be reused for a new loan.

Unique Appraisal Scenarios

Certain property types and conditions introduce specific considerations for FHA appraisal validity. For new construction, an FHA appraisal is mandatory. If the property is less than 90% complete at the time of the appraisal, the appraiser requires access to the floor plans, plot plans, and other exhibits to accurately determine its size and quality. Upon completion of construction, a final inspection or “satisfactory completion report” is necessary to confirm that the property aligns with the plans and specifications.

Properties that require repairs to meet FHA Minimum Property Requirements (MPR) or Minimum Property Standards (MPS) require specific appraisal considerations. In such cases, the appraisal will be conditioned as “subject to” the completion of these repairs. The appraiser will identify the necessary repairs, provide an estimated cost to cure, and include descriptive photographs in the report. These repairs must be completed and re-inspected before the loan can be finalized.