How Long Are Home Appraisals Good For?
Have you recently gotten a home appraisal and want to know how long it’s valid? This question comes up often, especially for those in the process of selling a house or refinancing their mortgage.
The truth is, a home appraisal reflects the value of your property at a specific moment in time. The type of loan, market conditions, neighborhood developments, and even the season can influence your home’s value, so an appraisal from a few months ago might no longer be accurate.
Let’s take a look at the different factors that affect an appraisal's length of validity and how long an appraisal lasts for each type of mortgage loan.
How long do home appraisals last for different types of loans?
Each type of mortgage — whether conventional, FHA, USDA, VA, or those backed by Fannie Mae and Freddie Mac — has specific guidelines regarding the lifespan of an appraisal. Here’s a breakdown of how long appraisals last for different loan types:
Conventional loans
Typically valid for 120 days for existing homes; up to one year for new homes.
Conventional loans offer flexibility in terms of home appraisals, with most lasting about 120 days. If you’re purchasing a newly constructed home, however, the appraisal can be valid for up to a year, giving buyers and builders more time to complete the sale.
FHA loans
Typically valid for 180 days.
Appraisals for FHA loans last slightly longer than conventional loans, with a 180-day validity. FHA loans, popular with first-time homebuyers because they provide lower down payment requirements, have a fixed appraisal duration that ensures the lender can trust the value of the home during this period.
USDA loans
Typically valid for 120 days, with a 30-day grace period.
For USDA loans, which are geared toward rural property purchases, the appraisal is typically valid for 120 days. In certain cases, borrowers are granted an additional 30-day grace period or even an additional 90 days with a one-time Appraisal Update Report. This means that a USDA appraisal can be valid for a total of 240 days.
VA loans
Typically valid for six months.
VA loan appraisals, designed for veterans and active-duty military personnel, last for six months. However, if the loan doesn’t close during that time, a new appraisal may be required. It's important to track the closing timeline to avoid needing a reappraisal.
Fannie Mae appraisals
Usually valid for 12 months.
Fannie Mae, a major player in the secondary mortgage market, allows appraisals to be valid for a full year. This is particularly beneficial for new constructions or cases where the home purchase process may extend over several months.
Freddie Mac
Valid for 12 months, with an update required after 120 days.
Freddie Mac operates similarly to Fannie Mae, purchasing loans on the secondary market. Its appraisals last for 12 months but must be updated after 120 days to ensure that the home’s value hasn’t changed significantly. Freddie Mac also mandates that lenders retain a copy of the appraisal report for record-keeping.
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Fluctuations in the real estate market
The real estate market is highly sensitive to economic conditions, interest rates, and local housing demand. These fluctuations can cause property values to change rapidly, impacting how long an appraisal remains valid.
Volatile market
In a volatile market, where property prices can rise or fall quickly, lenders may only accept an appraisal that is 30 to 60 days old. This short window ensures that the appraisal reflects the most current market conditions, reducing the risk of undervaluing or overvaluing the property.
Stable market
In a more stable market, where property values remain relatively consistent, lenders might be more comfortable relying on an appraisal that is up to six months old. The slower pace of change in stable markets allows for a longer validity period, as there is less concern about significant shifts in property value over a few months.
What to do when your appraisal expires
If your home appraisal expires or is about to expire, you might not need to get a new one just yet. However, you may need to take action to move the process forward. Here are a few things you can do if your home appraisal is expiring:
Request an extension
Some loan types allow for a brief extension of the appraisal's validity period. This is particularly helpful if you’re approaching the expiration date and need just a bit more time to finalize the transaction. USDA loans, for instance, often come with a 30-day grace period.
Most appraisal extensions also have certain requirements. They typically should not have already had an update prior and should not have reached the maximum effective date of the loan type.
It's important to check with your lender to see if an extension is possible and if any additional paperwork is required.
Order an appraisal update
Ordering an appraisal update means that you will get a new appraisal assignment for a property you previously had appraised. The appraiser will review the new market conditions and confirm that the property's value hasn’t changed since the last appraisal.
It’s important to note that appraisal updates are subject to the same USPAP requirements as any other appraisal assignment.
Recertification of Value (ROV)
Ordering an ROV will confirm an appraiser's original property valuation. It will not change the effective date of the original appraisal. It is typically required when the appraised value is contingent upon specific repairs or improvements.
The ROV verifies that those repairs have been completed as expected, ensuring the original valuation remains the same.
Still have questions? You can also check with your lender.
While this information should serve as a guide to determining how long your home appraisal is valid, it's always a good idea to check with your lender to understand their specific policies on appraisal expiration. Aligning the timing of the appraisal with market conditions is crucial, whether you’re buying, selling, or refinancing. This helps ensure an accurate, fair valuation of your property and avoids potential issues down the line.
Reach out to your lender if you have questions about market activity or the next steps to take with your appraisal.
