How is the Commissioner's Adjusted Fair Market Value (CAFMV) established for Foreclosure Sales and Post-Foreclosure Sales Efforts?

Unless otherwise directed by HUD, mortgagees must first obtain, and review for accuracy, an “as-is” FHA appraisal, which includes both an interior and exterior evaluation of the Property. If the property is occupied and an interior inspection cannot be obtained, an exterior-only inspection may be used.

  • The appraisal must be valid on the date of the foreclosure sale. The validity period for appraisals is 120 days.
  • HUD provides an automatic 30-Day extension from the appraisal expiration date for delays such as bankruptcy, court delays or delays outside of the mortgagee’s control.
  • The Appraiser must review property tax records for the Property to determine the amount outstanding and the terms of the Property Assessed Clean Energy (PACE) obligation:
    • if the Mortgagee notifies the Appraiser that the subject Property will remain subject to a PACE obligation,
    • when the Appraiser observes that the property taxes for the subject Property are higher than average for the neighborhood and type of dwelling, or
    • when the Appraiser observes energy-related building components or equipment or is aware of other PACE-allowed improvements during the inspection process.
  • The Appraiser must report the outstanding amount of the PACE obligation for the subject Property and provide a brief explanation of the terms.
  • Where energy and other PACE-allowed improvements have been made to the Property through a PACE program, the Appraiser must analyze and report the impact on value of the Property, whether positive or negative, of the PACE-related improvements and any additional obligation (i.e., the PACE special assessment).

If the Property is to be conveyed to HUD, the Mortgagee must upload into P260 a copy of the appraisal used to determine Commissioner's Adjusted Fair Market Value (CAFMV)  
After determining the property’s appraised value, the mortgagee’s authorized employees must access the CAFMV link in FHA Connection to determine a property’s CAFMV.
To access FHA Connection go to:
Any questions may be directed to the FHA Resource Center Toll-Free Telephone Number at (800) CALLFHA (225-5342) or by email to  Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at (800) 877-8339. 
For additional information see:

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-05155