Appraisal & Inspection

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Chapter 1
Appraisal & Property Requirements
Page 1-05

A: Appraisal fees

	The appraiser and lender will negotiate the price and due date, consistent with USPAP guidelines. This includes fees for canceled assignments, missed appointments, etc. (HUD Handbook 4150.2 Section (1-2) HUD no longer establishes fees or due dates also see Mortgagee Letter 97-22.
	Collection of unpaid fees are the responsibility of the appraiser.
	Fees are paid for market value estimates based on HUD policy and procedure. Fees are never contingent upon the appraiser arriving at a minimum or specific valuation, an amount or within a predetermined range of values or loan approval.
	Appraisal Management Firms may charge the mortgagor a fee for the appraisal that may encompass fees for services performed by the firm as well as fees for the appraisal itself. However, the total of these fees is limited to the customary and reasonable fee for an appraisal in the market area where the appraisal is performed. All aspects of RESPA must be complied with. (While the owners/operators of such Appraisal Management firms may be licensed, the appraiser actually doing the appraisal must be licensed and on HUD’s Approved Roster. No "supervisory" appraisals. That is, the licensed/approved appraiser must visit the subject and all comparables and complete the appraisal analysis. Others may accompany this appraiser to assist with measuring and photo taking, but the Roster Appraiser must actually do the appraisal and sign it.) Appraisal trainees shall not sign on the appraisal report in any capacity.

	Inspection and Mileage Fee - Get individual HOC maximum inspection fees. This is for both new construction and repair inspections. Inspection and mileage may differ within individual HOC jurisdictions.
	203(k) Inspections. The fees for 203(k)s are outlined in HUD Handbook 4240.4 Rev-2 and Mortgagee Letter 95-40.

Appraisal written on the Uniform Residential Appraisal Report form (URAR), the Federal National Mortgage Association’s (FNMA) Individual Condominium Unit Appraisal Report form, or FNMA’s Small Residential Income Property Appraisal Report form are acceptable to the Department. Currently, only these forms are acceptable for FHA cases. Other FNMA appraisal forms which are used for streamlined appraisal or a qualitative sales comparison analysis are not acceptable at this time. Please see: Mortgagee Letter 97-22.