The U.S. Department of Housing and Urban Development (HUD) just revised appraisal guidelines for REO properties they own. All appraisals done to establish the listing price with an effective date on or after April 1, 2010 will now be valid for only 120 days. This update is a change from the current 6 month period.
The rule regarding second appraisals to support a higher purchase price has also been modified. HUD now says that when a buyer is using FHA financing to purchase a HUD REO property, the appraisal that was used to determine the list price will remain effective when obtaining the FHA mortgage. A second appraisal can’t be ordered just to support a higher purchase price. It can only be ordered to support a higher sales price if there are material deficiencies with the current appraisal, or if the current appraisal won’t be valid on the date of contract ratification.
Metrowide Appraisals