Just Approved: FHA allows “drive-by” appraisals for HECM reverse mortgage because of COVID-19

Mortgage loan originator: David Chee, CPA, HighTechLending Inc.

Property type: Single-family home in the East Bay.

Loan availability: $492,000.

Available line of credit: $385,000.

Interest rate: 2.526%.

Loan type: Home Equity Conversion Mortgage (HECM), a.k.a. FHA reverse mortgage

Backstory: This borrower contacted me several years ago about a reverse mortgage. I picked up that she was hesitant about my coming to her home to explain how reverse mortgages work. Later, it did come out that she was embarrassed about the overly cluttered nature of the home interior.

I explained that as long as the clutter was not creating any health or safety hazards, it would likely be fine. Even though she understood that she still seemed horrified that an appraiser would need to come into her home for photos and measurements. Fast forward to 2020. I contacted her to let her know that because of COVID-19, the Federal Housing Authority (FHA) is accepting “drive-by” appraisals.

We recently closed her FHA HECM reverse mortgage and she is very happy to no longer have monthly mortgage payments and have an available growing line of credit for her future.

As a result of COVID-19, the FHA is accepting “drive-by” appraisals through October 31. This means appraisers do not need to enter your home and only need to take an exterior photo from the street. This allows appraisers to observe prudent physically distancing practices while conducting an appraisal.

Some people have anxiety about strangers entering their home due to pets, clutter or other issues. If this has been holding you back, this is a good time to consider a drive by appraisal...