2 Appraisals on FHA when over 100% of original purchase price.WHY

[Dane Peterson]

I'm still pretty green to real estate. Two years and counting and I love that every deal has it's own challenges or hurdles. Even the easiest of deals will have something.

Another new "policy" has just been explained to me by the lender, for the borrower, that the FHA requires a 2nd appraisal when the purchase price is over 100% of the seller's purchase price and within the 91-180day period... Also to go along with this, the FHA will not allow the buyer to pay for that 2nd appraisal (not that I would if I was the buyer).

Can anyone give me the reasoning for this? I understand the 90day seasoning rule in effect with the FHA on rehabs but what does the price have anything to do with it when there are plenty of comps, proof of paid rehab work & the 1st appraisal comes in to justify the price? We aren't overpriced if anything we are under.

I'm not complaining by any means. Plenty of profit in the deal that coming out of pocket either $250 (if buyer's agent will pay half) or $500 isn't that big a deal but it's the policy itself. If the FHA wants to implement this sort of policy then it should be on the lender or FHA to cover this. Also I'm always on the listing, selling or cash buyer side so I never deal with the appraisals besides to let the appraiser in the property but is $500 standard for appraisals right now? Seems a bit steep and i'm assuming this is a lender cost that's fluffed a bit.