A home appraisal determines the fair market value of a house and confirms that the price agreed upon by the buyer and lender is reasonable.
However, the appraisal performed when you acquire a property doesn’t last forever, so how long can an appraisal last for? We’ll look at how different loan kinds influence appraisals and what you should know when your appraisal expires.
How Long Is a Home Appraisal Good For?
Most appraisals are valid for 90 days, however, this might vary based on factors such as the type of loan and the current situation of the real estate market.
So, why don’t assessments last longer? The solution is found in how appraisers assess property value. Appraisers often use recent neighborhood sales, known as ‘comps,’ to assess a property’s value. Because these comparisons vary in the real estate market, the value of a property might change, requiring an updated appraisal.
How Appraisal Validities Differ for Every Type of Loan
Beyond market fluctuations, the mortgage type affects the appraisal’s duration.
Conventional loan appraisals vary in duration, with existing home appraisals typically valid for 120 days and new home appraisals for up to a year.
Federal Housing Administration (FHA) Loan
An FHA appraisal remains valid for 180 days, but it can be extended up to a year with updates. If the case number assignment changes within that time frame, a new appraisal may be necessary.
Fannie Mae and Freddie Mac
Both Fannie Mae and Freddie Mac are firms that support mortgages by purchasing them from banks and lenders and then selling them to investors as part of mortgage-backed securities, so assisting the mortgage market in keeping housing affordable.
These appraisals are typically valid for 12 months, but they require an appraisal update after the first 120 days.
A USDA loan, supported by the US Department of Agriculture, is designed for rural homebuyers. These loans’ appraisals are valid for 120 days and have a 30-day grace period.
Veteran Affairs (VA) Loan
A mortgage designed for qualifying veterans, active duty members, and spouses provide appraisals that are valid for up to 6 months; however, if the loan fails to settle during that period, a new appraisal is required.
The state of the real estate market significantly affects appraisal validity. In a volatile market with changing values, appraisals tend to expire sooner because lenders want the most current property value. In a steady market, however, the lender would most likely rely on the initial appraisal.
Home Appraisal Expires
When an appraisal expires, the borrower has several alternatives, based on their circumstances, such as appraisal extensions and updates.
Appraisal Extensions And Updates
When a home appraisal expires, borrowers may qualify for an extension under specific conditions.
Another alternative is to update your appraisal.. Although appraisal updates do not give a fresh opinion of property worth, the appraiser evaluates current market circumstances and can certify the home’s value has not fallen since the previous appraisal’s effective date.
Recertification Of Value
A recertification of value (ROV) is a review to confirm that the repairs specified in the initial appraisal have been completed. It verifies the property’s original value rather than determining a new one.
Can Your Home Appraisal Be Revoked?
Conditions post-appraisal can lead to revoking the original appraisal, even if it hasn’t expired. This typically occurs when there’s a significant change in the house’s condition, such as home improvements or property damage.
While house appraisals have limited validity, they provide valuable property value information to both borrowers and lenders. Some assessments may take longer than others depending on the real estate market, loan type, and lender, so be sure to review your appraisal criteria directly with the lender.
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