HUD recently released Mortgagee Letter (ML) 2020-37, which updates two pieces of COVID-19 related temporary guidance the agency released earlier this year. First, the letter extends the re-verification of employment guidance from ML 2020-05 (originally issued in March and extended several times since then), which is now effective for cases closed on or before December 31, 2020.
Second, the letter updates FHA’s Appraisal Protocols, previously announced in ML 2020-05, also in response to the COVID-19 pandemic. The changes include discontinuing the option of Desktop-Only Appraisal inspection (which therefore expired on October 31, 2020). The guidance still permits the Exterior-Only Appraisal inspection scope of work, for the programs and transactions originally identified in ML 2020-05, and provides updated guidance on the implementation of that option. The letter explains that “the Exterior-Only Appraisal option has been demonstrated as effective in support of initiatives to combat the spread of COVID-19 by limiting face-to-face contact across all eligible program transactions,” making the Desktop-Only option no longer necessary.
The updated appraisal guidance scope of work became effective November 1, 2020, and will remain for appraisals with an effective date on or before December 31, 2020.