In addition to fluctuations in the real estate market, the specific type of mortgage loan will also play a role in determining how long a home appraisal is good for.
Conventional Loan
Conventional loan appraisals are typically the least restrictive, with appraisals on existing homes good for 120 days and appraisals on new homes valid for up to a year.
Federal Housing Administration (FHA) Loan
An FHA appraisal is valid for 180 days unless it’s updated, in which case they can last for up to a year. If the case number assignment changes during that time, a new appraisal may be ordered regardless of how many days have passed.
Fannie Mae
Fannie Mae is a corporation that funds mortgages by buying them from banks and lenders, then selling them as a part of mortgage-backed securities to investors, which helps the mortgage market keep housing affordable. Fannie Mae appraisals are usually valid for 12 months, but they also require an appraisal update after the first 120 days.
Freddie Mac
Similar to Fannie Mae, Freddie Mac contributes to the secondary mortgage market, and its appraisals are valid for 12 months, with updates due after 120 days. Freddie Mac also requires the lender to have a copy of the appraisal report.
USDA Loan
A USDA loan – backed by the U.S. Department of Agriculture – is a mortgage tailored for home buyers in rural areas. Appraisals on these loans are valid for 120 days and come with a 30-day grace period.
Veteran Affairs (VA) Loan
VA loans, a type of mortgage created for qualified veterans, active service members and spouses, offer appraisals that are good for up to 6 months – but a new appraisal is required if the loan doesn’t close during that time.
FAQs
Technically, appraisals don't expire, but lenders may refuse to honor them if they think the appraisal is too old. Most appraisals will be accepted for 90 days and many for up to six months. Rapidly changing market conditions can reduce the time frame to as little as 30 days.
How recent should an appraisal be? ›
Age of Appraisal and Appraisal Update Requirements
When an appraisal is obtained, the property must be appraised within the 12 months prior to the date of the note and mortgage.
Can you reuse an appraisal? ›
Use of an Appraisal for a Subsequent Transaction
The subsequent transaction may only be a limited cash-out refinance. The age of the appraisal report must be less than 12 months from the note date of the subsequent transaction.
Can seller back out if appraisal is low? ›
If your appraised value is lower than the agreed upon sales price, you'll have to make up the difference in cash, or cancel the deal.
What is an appraisal review period? ›
USPAP defines appraisal review as, “The act or process of developing an opinion about the quality of another appraiser's work (i.e., a report, part of a report, a workfile, or some combination of these), that was performed as part of an appraisal or appraisal review assignment.”
How often do appraisals get changed? ›
How often do appraisals get changed? Most experts say it doesn't happen often. However, the benefits of a proper home valuation doesn't just end with a purchase or sale of a home. Refinance loans, home equity lines of credit, insurance premiums and property taxes are all based on appraised value.
What is the most important date on an appraisal? ›
One of the most important is what the effective date is on an appraisal report. In short, this is the date that the appraisal report is based on, and it can have a big impact on the value of your home.
How long is an appraisal good for FHA? ›
How long is an FHA appraisal good for? FHA appraisals are valid for up to 180 days. An updated appraisal is valid for 240 days to one year after the initial appraisal report.
What negatively affects home appraisal? ›
Having outdated appliances, plumbing, electrical, and HVAC systems could decrease the value of your property. Dated features in your home's interior could imply that the property has not been well-maintained, which could raise concerns about any underlying issues.
Can seller ask for more after appraisal? ›
Can the seller back out of a high appraisal sale? Can the seller back out if your appraisal is high? Realistically, the answer is “no.” For one, they accepted your offer and would be breaching the sales contract if they wanted to put the house back on the market to capture a higher price.
Some appraisal firms may charge a small fee because additional clerical work is required to reflect the new mortgage company; this is called an “Appraisal Retype Fee”. The original mortgage company has the right to refuse to transfer the appraisal to another lender. In this case, a new appraisal is needed.
What are the mistakes during appraisal? ›
Recency Error: Recency error in performance appraisal is all about giving disproportionate weight to an employee's most recent performance rather than considering their overall performance over a specific period. This bias can lead to overlooking long-term achievements or progress.
Do appraisals usually come in at asking price? ›
Home sellers usually want the appraisal value to match their asking price for a smooth real estate transaction. However, the value of a house determined by an appraisal might not be the same as what sellers are asking for.
Why do appraisers lowball? ›
Overpricing: Ongoing shifts in the market, several recent foreclosures in the area or the presence of many distressed homes can affect the value of a home. Sometimes without sellers even realizing it. So if they overprice their homes, the appraisal value is bound to be lower than expected.
Can seller walk away after appraisal? ›
No, the seller can't back out of escrow based on the results of an appraisal. If the appraisal is higher than the sale price, the seller can't nix the contract to pursue a better offer — unless they have another valid reason.
How often do you need an appraisal? ›
When you have a mortgage. If your home is still under mortgage, you should consider a home appraisal every one or two years. The updated value will help with refinancing.
How long must an appraiser keep a workfile? ›
An appraiser must retain the workfile for a period of at least five years after preparation or at least two years after final disposition of any judicial proceeding in which the appraiser provided testimony related to the assignment, whichever period expires last.
How long is an FHA appraisal good for? ›
How long is an FHA appraisal good for? FHA appraisals are valid for up to 180 days. An updated appraisal is valid for 240 days to one year after the initial appraisal report.
What happens after the appraisal is completed? ›
If all goes well, the appraisal gets slipped into the pile of paperwork and the closing process takes one step forward. The next step is mortgage underwriting. The underwriter reviews the entire loan file to make sure everything is in order and that all the required documents have been submitted.
