What is the appraisal validity period for a damaged property located in a Disaster Area?

For mortgages that are not closed prior to the Incident Period, as defined by FEMA, in Presidentially Declared Major Disaster Areas (PDMDA) where a damage inspection report reveals property damage, the appraisal validity period is extended from 120 days to a maximum of one year from the effective date of the original appraisal.

In no instance will an appraisal be acceptable for a mortgage closing that has an effective date beyond one year. Mortgages with appraisals having effective dates in excess of one year require a new appraisal.

For additional information see Handbook 4000.1 II.A.7.c.iii. available at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

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: KA-02000