On March 19, 2025, the Federal Housing Administration (“FHA”) issued Mortgagee Letter (ML) 2025-08 to announce that the agency is rescinding appraisal policies issued in three previous Mortgagee Letters and restoring the prior policy regarding appraisal reviews.
The Mortgagee Letters that are rescinded include:
- ML 2024-07, Appraisal Review and Reconsideration of Value Updates;
- ML 2024-16, Extension to the Effective Date of Appraisal Review and Reconsideration of Value (ROV) Updates; and
- ML-2021-07 Appraisal Fair Housing Compliance and Updated General Appraiser Requirements
ML 2025-08 states that the policy changes are part of the new Administration’s broader goal to reduce unnecessary regulatory burden. Background information provided in current Mortgagee Letter states that the guidance provided in ML 2021-27 regarding fair housing laws was issued prior to amendments of the Uniform Standards of Professional Appraisal Practice Ethics Rule, which now fully covers the same concerns. ML 2025-08 also rescinds 2024 policies on borrower-initiated reconsideration of value requests, previously discussed here and here, stating that not enough data analysis has been completed on the impact of these policies.
The rescission of previous policies, which applies to all FHA Single Family Title II Forward and Home Equity Conversion Mortgages programs, was effective immediately. The provisions of the previous appraisal policies will be incorporated into an upcoming publication of HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook.
Accordingly, DocMagic will be removing the Reconsideration of Value Disclosure (Form ID: ROVD.MSC) and the Reconsideration of Value Request Form (Form ID: ROVRF.MSC) for FHA loans beginning on April 1, 2025. Clients may have the forms removed before that date upon request.
It should be noted that the Reconsideration of Value forms will continue to be provided for conventional loans as required by the Federal Housing Finance Agency (“FHFA”) until that agency announces a change to its current policy.
