7.6.1 Effective Date

A. For pre-applications, all appraisals must have an effective date within 120 calendar days before the date of the pre-application package. For Firm Commitments, the effective date of the appraisal must be within 180 calendar days prior to the issuance of the Firm Commitment. The MF Regional Center/Satellite Office may require an updated appraisal prior to an amendment, re-issuance, or an extension of the Firm Commitment (e.g., if there is a material change in the terms of the mortgage or in the market conditions and market data upon which the Firm Commitment was based.) Expired reports may be amended or updated as needed by re-surveying all relevant data. HUD defines the effective date as the most current date that the appraiser inspected the subject and comparables and developed estimates of rents and expenses. Updated appraisals can be submitted if the appraiser re-inspects the exterior of the subject project, re-surveys the rental comparables, and reviews the market for any additional sales comparables. USPAP Advisory Opinion 3 should be followed for guidance on completing and reporting appraisal updates. Lenders should provide for updates in their response to the invitation letter in case of processing delays prior to issuance of the Firm Commitment. The Regional Center/Satellite Office has the authority to waive the 180-day requirement or decrease the amount of time until expiration of the report depending on market conditions.

B. HUD recognizes that occasionally there may be situations where the Inspection Date and Effective Date may differ, but there should not be a significant difference between the Inspection Date and the Effective Date. While in the course of preparing the appraisal report, new market information may become available that has a material effect on the results of the appraisal. This should be noted in the appraisal report. If there are questions, the Regional/Satellite Office (rather than HUD HQ) should be consulted.