Can a Mortgagee use a conventional, VA, or USDA appraisal or enter it into EAD?

If a Mortgagee obtains an appraisal for a conventional, VA or USDA loan, and then decides to switch to FHA-insured mortgage financing, the Mortgagee must instruct the appraiser to provide a new appraisal that:
  • complies with FHA Minimum Property Requirements and Standards (MPR and MPS) if the appraiser did not follow FHA Protocols when inspecting the home;
  • meets Electronic Appraisal Delivery (EAD) requirements;
  • provides the FHA case number in the appropriate location; and
  • names FHA as the intended user of the appraisal.
When an appraisal is updated to change it to an FHA loan from another loan type, it is considered a new assignment for the appraiser.

HUD Policy Determination

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-03341