The Federal Housing Administration (FHA) released Mortgagee Letter 2010-13 Appraisal Update and/or Completion Report providing additional guidance to ML 2009-51. ML 2010-13 discusses two prohibitions on the use of an appraisal report, the Market Conditions Form, and permissible validity periods.

ML 2009-51 outlines two additional prohibitions on the use of an appraisal report. First, an original appraisal report can only be updated one time using the Appraisal Update Report (AUR). Second, the AUR may not be used when ordered by a lender who is not identified as the intended user in the original appraisal report unless the original report is incorporated into the update. The appraiser must include a completed Market Conditions Addendum for the subject property. An appraisal with no AUR has a 150 day validity period (120 day validity period for the original appraisal plus 30 day extension period as permitted by HUD). An appraisal with an AUR has a 240 day validity period.

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