My brother-in-law is in real estate. Can I order the appraisal through him?

I understand the thinking. You know someone in the business, he knows your neighborhood, and it seems like it would save time. But the answer is no, and the reason protects you.

Why we can't use it

After the housing crisis, federal rules put a wall between the people involved in a loan and the person deciding what the home is worth. The idea is simple: nobody with a stake in the deal should be able to pick the appraiser or lean on the number.

So for your reverse mortgage:

• Your lender orders the appraisal, usually through an appraisal management company (AMC).
• The lender or its AMC assigns the appraiser. For a HECM, it has to be an appraiser on FHA's roster.
• Neither you, nor we, nor a relative, nor a real estate agent picks who shows up.

An AMC helps keep originators like us separate from the appraisers. If you order an appraisal yourself, we can't use the report, and you'd be out whatever you spent on it.

This has nothing to do with your brother-in-law's honesty. The rule applies to everyone. A relative in real estate is exactly the kind of connection the rules are written around.

How he can still help

He can't order it, but he can be useful:

• Pull recent sales of similar homes nearby. You can pass those to your loan officer, who can share them for the appraiser to consider. The appraiser decides what to use.
• Help you make a list of improvements you've made, with rough dates: a new roof, a remodeled kitchen, solar, HVAC.
• Walk through the home with you beforehand and point out anything that might be flagged, like a missing handrail or peeling paint.

What nobody can do is pressure the appraiser toward a number. That includes calling them, hinting at a value, or asking them to "find" one.

What to expect from the appraisal

• An FHA appraiser visits the home, inside and out, and writes up the value and condition.
• HECM appraisals go through an FHA review, and sometimes a second appraisal is required. If that happens on one of our loans, ZYNG often covers the cost. See Is there a situation where I would need 2 appraisals?
• You'll get a copy of the appraisal.
• If something needs repair, we'll talk about whether it can be done after closing or has to be done first.

What to do next

Get your list of improvements together. Once your application is in, the lender will order the appraisal. Call us at 530-888-6000 with any questions. See How a Reverse Mortgage Works for the full process.

Related questions

• Is there a situation where I would need 2 appraisals?
• Can I do a reverse mortgage on a manufactured home with a stick built addition?
• How much money would I be eligible for?

Sources

• Regulation Z, 12 CFR 1026.42, Valuation independence (CFPB): consumerfinance.gov
• HUD Single Family Housing Policy Handbook 4000.1: hud.gov