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Suppose you're an FHA loan applicant who has gotten to the appraisal stage of the home loan process, but you decide you're dissatisfied with your lender and decide to find a new one. What should you do?

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Are FHA Home Loan Appraisals Portable?

August 6, 2012 - Many FHA loan applicants won't need to know the answer to the question, "Are FHA home loan appraisals transferable or portable?". But for some borrowers, this becomes a key issue. Suppose you're an FHA loan applicant who has gotten to the appraisal stage of the home loan process, but you decide you're dissatisfied with your lender and decide to find a new one.

You might find yourself in a situation where you need to ask, "I applied for an FHA loan through a large company a few months ago. I have decided to switch mortgage companies as the customer service has been really awful...Can I use the appraisal from the FHA loan process that I am currently going through with the new mortgage company?"

Fortunately, the FHA issued guidance on this issue in back 2009, with the publication of FHA Mortgagee Letter 09-29.

A portion of that mortgagee letter titled Appraisal Transfer and Change of Client Name in Appraisal Report states the following:

"In cases where a borrower has switched lenders, the first lender must, at the borrower's request, transfer the case to the second lender. FHA does not require that the client name on the appraisal be changed when it is transferred to another lender."

Getting your appraisal transferred requires action on your part--the transfer of an FHA appraisal is NOT automatic just because you switch lenders. The borrower must request a transfer of the appraisal (assuming it has not expired) from the old lender to the new one.

Additionally, according to the FHA, "In accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), the lender is not permitted to request that the appraiser change the name of the client within the appraisal report unless it is a new appraisal assignment. To effect a client name change, the second lender and the original appraiser may engage in a new appraisal assignment wherein the scope of work is limited to the client name change. A new client name should include the name of the client (lender) and HUD."

For more information on appraisal transfers or to get advice on a transfer you're trying to accomplish now, contact the FHA directly at 1-800 CALL FHA.