Here is what I got after some research with a client of mine.. I hope it helps..   When FHA needs second appraisals

  Quoted directly from Mortgagee Letter 2008-09, dated April 4, 2008, effective 1/1/09  "Second Appraisal Requirements/Loan-to-Value Limits for Cash-Out Refinances: The instructions in ML 2008-09 regarding when a second appraisal is needed, and the requirements for that second appraisal, as well as the 85 percent limitation on cash-out refinances when the loan balance will exceed $417,000, remain in effect."  "In addition, FHA will now require a second appraisal for all cash-out refinances where the LTV, exclusive of the UFMIP, will exceed 85 percent of the appraiser's estimate of value. This second appraisal requirement applies regardless of the loan amount or the location of the property, i.e., whether the property is in a "declining area" or is not. This second appraisal requirement for cash-out refinances is effective for all case number assignments on or after January 1, 2009 and is to adhere to the instructions set forth in ML 2008-09. Please also note that cash-out refinances with LTVs exceeding 85 percent will be over-selected for post-endorsement technical reviews (PETR) to assure the quality of the underwriting."

Print this out and tape it near your computer to remind yourself...

Sincerely,

Victor M. Jaramillo
Sales Manager/Mortgage Consultant
President's Club
Omega Financial
1872 Morris Ave.
Union, NJ 07083
(908) 933-0253 Ext. 328
(908) 964-0295 Fax
(908) 296-0966 Cell
www.FHAOMEGA.com
Lic. Mortgage Bankers by the NJ dept., of Banking & Insurance
Equal Housing Lenders
Lions Club Member, 98
vjaramillo@omegafunding.net