When a second appraisal is required on a Home Equity Conversion Mortgage (HECM) which appraisal is used to calculate the maximum claim amount?

If FHA requires a second appraisal for a HECM, the Mortgagee must use the lower of the two appraisals to calculate the maximum claim amount.

 

For additional information see Mortgagee Letter 2018-06 available at: https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: 2018-0035