Book Review


The Complete HUD-FHA Combo Set
Vol. 1 & Vol. 2

Compiled by Henry S. Harrison, MAI, ASA, IFAS, DREI
Vol. 1 & Vol. 2 Combo Set •  $67.50 + S&H
Publication Date: 2013

phone: 1-800-243-4545

Any appraiser doing FHA appraisals needs to have a copy of "FHA Handbook HUD-4150.2" and Chapter 4 from FHA Handbook 4155.2 (only chapter 4 apples to appraisers), the 28 mortgage letters that update the Handbooks and the over 150 of the Frequently Asked Questions supplied by the FHA to help understand their publications.

I want to take this opportunity to share with you my experience in compiling these two FHA Handbooks. While this information is available free of charge from the FHA site, downloading it all is a nightmarish undertaking.

My first plan was to combine this updated 2013 material into one book as I had done in the past. Unfortunately, the FHA has expanded this material so much that it will no longer fit into one volume using my printer – the same printer I have used for many years to print my books because of their good quality, fair prices and reliable delivery time.

If you would like to get a free copy of the FHA Handbook HUD-4150.2 by downloading it from the FHA site here is what you do:
1. Go the the FHA site at
2. Click on the left hand column under Audience Groups click on "Appraisers"
3. Click on the left hand column under Find Answers click on "Mortgagee Letters and Handbooks
4. Click on the right hand column under Reference Materials "Handbook HUD-4150.2

Here is where I ran into trouble. On this page there is a choice of downloading the handbook as a word fillable form or a PDF version. I could not get the "word fillable form" version to work so I resorted to downloading each of the individual nine PDF files. The result is a manual of about 350 pages.

Unfortunately, this is not all you need. You also need to download from the lenders handbook "Chapter 4 "Property Valuation and Appraisals" from HUD Handbook 4155.2. The subjects of interest to appraisers in this Chapter 4 are as follows:

  • the purpose of property valuation
  • lender responsibility for appraisers
  • appraisal management company (AMC) and third party organization fees
  • verification of compliance with property requirements
  • lender responsibility for determination of property eligibility and accuracy of appraisal value
  • variation in property appraisal and underwriting process
  • property eligiblity for FHA insurance
  • property eligibility under section 223 (e)
  • compliance inspection requirements
  • appraisal assignment to ensure appraiser competency
  • preventing improper influences on appraisers
  • prohibition of mortgage brokers and commission based lender staff from the appraisal process
  • appraiser independence safeguards
  • appraiser selection in the FHA connection, and
  • DE underwriter responsibility for quality of appraisal report.

If you would like to get a free copy of the FHA Handbook HUD-4155.2 by downloading it from the FHA site here is what you do:
  1. Go the the FHA site at
  2. Click on the left hand column under Audience Groups click on "Appraisers"
  3. Click on the left hand column under Find Answers click on "Mortgagee Letters and Handbooks"
  4. Click on the right hand column under Reference Materials "Handbook HUD-4150.2"

The FHA Handbooks are now over four year old and there are 28 mortgage letters that have been issued. All of them are needed to update these FHA Handbooks. Instead of issuing a new edition of their publications, the FHA has issued 150 FAQs that update the texts:
  • HUD ML 2012-23: Loan Origination Procedure Q&A: 4 pages
  • FAQ: Natural Disaster Protocols: 1 page
  • FAQs UAD and Other Appr Forms ML 11-30: Special FHA UAD requirements
  • L 11-07 Elimination of Master Appr Rpt.: When case numbers can no longer be assigned
  • FAQs Declared Disaster Area ML 12-23
  • ML 12-23  Declared Disaster Areas: Included with mortgage letters
  • FAQs Disaster Loans Before 11/16: FAQ; Natural Disaster Protocols, 1 page chart
  • FAQs UAD and Other Appr Forms ML 11-30: Special FHA UAD requirements
  • ML 11-07 Elimination of Master Appr Rpt,: When case numbers can no longer be assigned
  • FAQs Lead Based Paint:Clarifies who can inspect for lead when the property was built before 1978
  • FAQs Reasonable Fees/Time: Spells out the FHA's position on how reasonable fees are determined.
  • FAQs Meth Remediation: Clarifies what to do when there is methamphetamine contamination
  • FAQs Appraiser Valuation: 37 pages covering 16 subjects
  • FAQs Appraiser Roster Link not active as of 8/8/2013
  • FAQs , Update ML 09-51: Claries by whom and when an update report may be prepared.
  • FAQs Appraisal Portability ML 09-29: Clarifies whom and when a second appraisal report is required
  • FAQs Appraiser Independence ML 09-28: 6 pages clarifying by whom and when fees can be collected.

The bottom line is this: Any appraiser who is doing FHA appraisals needs to have a copy of "FHA Handbook HUD-4150.2" and Chapter 4 from FHA Handbook 4155.2 (only chapter 4 apples to appraisers), the 28 mortgage letters that update the Handbooks and the over 150 of Frequently Asked Questions supplied by the FHA to help understand their publications. I have compiled these documents and sell them as a combined set with included CD-ROMs of all of the resources for your convenience.

The Complete HUD-FHA Combo Set is available from
Forms and Worms 1-800 243-4545 or for 25%-off when you buy the combination.



Ask Henry

Dear H2,

Why are some appraisers claiming that the UAD fails to meet USPAP?

Robert O'Brien

Dear Robert,

So far no one has sent me a valid reason why complying with the UAD would require an appraiser to make an appraisal that does not meet the requirements of the USPAP. I do not know who has been making these claims, but I don't think they are valid.


Sound Off!

Dear Henry,
I see some merit to your proposed solution to the housing industry crisis (June 2011 Editorial). I just do not give it much hope. There are too many powerful lobbies that would rather just suck off the taxpayers while they sail to the Hamptons in their newly redecorated yachts.

I am sorry to say that the lessons that should have been learned from the RTC back in the mid-1980s were soon forgotten like a bad dream. The exuberance of lessened oversight allowed a new class of lenders that have brought back the dream as a recurring nightmare. The cost to taxpayers this time is more than money -- it's a fundamental sense of security and faith in our leaders and elected representatives that has been lost.

Regulation and the standardization of the appraisal industry should have been a good thing. New forms (then the MC and now the UAD) were supposedly designed to help. Now, appraisal is being delegated to the lowest common denominator generated by a computer model. May as well call it an AVM and be done with it.

Yes: we as an industry are growing old. There will be no new blood when the pay is less than a mindless position in a fast food or retail associate's job. There is no substitute for experience and honesty -- and experience is damned expensive. Tell me how many less than honest people have been reprimanded or lost their certification? Tell me how many young people can withstand years of substandard pay and costly education to qualify for a tenuous crack at independent self employment? And what is the meaning of "reasonable and customary fees"? All I know is that back in the 1970s, fees were in the $300+ range, there was a rotation at most lenders, and if too many bad valuations surfaced, you got drooped like a hot potato. Maybe there was more time and physical labor involved. Today, the cost of everything from insurance to data sources to software and hardware has skyrocketed. Rates have not changed much, except that the AMCs take a hefty cut. Many appraisers do not want to or will not work for an AMC -- or so they say.

Try to live in this market if you do not have some steady work! I would like to know just what percentage of assignments are not involved with an AMC. Perhaps someone should do a survey!

Joe Johnson
Cert. Residential Appraiser, FL


by Tom Kirchmeyer, SRA of Kirchmeyer Klips

As of August 1, 2011, we will be delivering UAD compliant appraisal reports to some of our lender clients that have requested an early start in order to get used to the new format. Appraisers are REQUIRED to submit UAD compliant appraisal reports on inspections effective September 1, 2011.

Here are a few more UAD FAQs:

Question: Where is the name of an AMC involved in an appraisal assignment reported?

Answer: The AMC name must be reported on Page 6 of the appraisal report in the “Name” field under “Lender/Client”. The “Lender/Client” field on Page 1 of the appraisal report should be used for the lender only.

My take: We will no longer require that this statement be included on the report: “This appraisal was completed for KA on behalf of [lender]”.

Question: The UAD requires the distance between the subject property and the comparable properties to be reported in miles with a directional indicator. How does this apply to properties that are located in the same building or in very close proximity to each other (i.e., the subject and the comparable property are condominium units located within the same building)?

Answer: In cases where the subject property and comparable property are located in the same building, the distance is to be reported in miles. However, in such cases a directional indicator is not required. For example, for condominium units located in the same building, the required distance for this field could be reported as “0 miles”, “0.0 miles” or “0.00 miles.” For properties that are located in very close proximity to each other, but not in the same building (such as adjoining properties or properties located across the street from each other), the distance is reported in miles with a directional indicator. For adjoining properties, a correct entry for the required distance and a directional indicator could be similar to the following examples: "0.01 mile W" or "0.04 mile NE."

My take: You will no longer see “same street” or “3 blocks north”.

Question: Can the UAD be applied to the other GSE appraisal report forms?

Answer: Yes. The UAD specifications may be applied to the other GSE appraisal forms, where applicable, if required by the client. However, an explanation of any standardized ratings/definitions, abbreviations, and formatting must be included in the appraisal report or an addendum.

My take: I think it’s a great idea to have the appraiser continue using the UAD Quality and Condition ratings on other non-UAD compliant forms such as the 2-4 family, co-op, and  manufactured home forms. As long as the appraiser includes the rating descriptions in the report, the lender and borrower will understand. I do think the new rating system for Q and C is better than the existing (old) system of average, average(+), fair, etc. And let's face facts: nobody ever truly understood what average meant!

Thomas J. Kirchmeyer, SRA is President of Kirchmeyer and Associates of Buffalo, NY. His Kirchmeyer Klips are popular with real estate professionals throughout the country. Click here for more information:
Email Tom directly at:


Who's Against the UAD? (Who's For It?) Stay Tuned...

Two important letters have been written to the General Counsel of the Federal Housing Finance Agency (FHFA) which is the government agency current in charge of Fannie Mae and Freddie Mac because of their dire financial condition. Both of these letters are critical of the UAD and its proposed implementation. One letter is from Ami Mine-Allen, President of the Association of Appraisal Regulatory Officials (AARO). The other is from J. Carl Schultz, Chair of the Appraisal Standards Board (ASB) of the Appraisal Foundation.

It always surprises me how many appraisers are confused about the functions of the Appraisal Foundation, the State Real Estate Appraisal Commissions and their regulatory officials. The Appraisal Foundations creates the standards (USPAP), but has no authority or mechanism to enforce them. The individual state Real Estate Appraisal Commissions and their regulatory officials grant licenses and certifications, and are in charge of enforcing the USPAP along with their "state specific" regulations.

Ask Henry

Coping with the UAD

Dear Mr. Harrison,
I recently purchased and received your excellent book on the UAD for the URAR.

I understand that the 2-4 form is not yet affected by the UAD, but I have not found a definitive statement anywhere regarding Condominiums or the 1073 form. One of my clients just asked me again, so I said, “Well, if anyone will know for sure, it will be Henry Harrison.”

So, I’m wondering what you know about condos being affected by the UAD. Since you didn’t write a UAD book for condos, I’m thinking they’re not affected, but I’d like to know for sure. I would appreciate hearing what you know on the subject. As an aside, it was your fine series of books that got me started 20 years ago and I was so happy to see that you are still in the business and going strong.

Best regards,
Michael Siegfried
HomeWest Appraisal

Dear Michael,

Thank you for the kind words about my new UAD book, and my other books you've used during your appraisal career. Every author is delighted to have fans!

The UAD applies to the URAR, Individual Condo Unit Appraisal Report, Exterior-Only Inspection Individual Condominium Appraisal Report and the Exterior-Only Inspection Residential Appraisal Report.

You can verify this at It took me over three months to write the UAD-URAR book. The material that Fannie Mae made available to the computer programers was much more helpful than Appendix D which was designed for appraisers. I also had help from the software vendors who in turn had access to Fannie Mae when they ran into trouble.  I am thinking about doing Guides for the other forms but have not decided yet.


Feature Article

Highlights: Harrison’s Complete UAD Guide
by Henry S Harrison

As of September 1st, 2011, appraisers will be required to make some significant changes in the way they prepare the URAR because Fannie Mae, Freddie Mac, FHA, and the VA are going to require all appraisal reports be transmitted electronically in a standardized format. All URAR appraisal reports with an effective date on or after the first of September submitted to Fannie Mae or Freddie Mac will have to meet the new Uniform Appraisal Dataset (UAD) standards (and shortly for FHA and VA too).

The UAD requirements have been designed to allow appraisers to make appraisals that comply with the USPAP, and include everything the appraiser believes is necessary to make a credible appraisal as required by the USPAP. Appraisers should start making appraisals that meet UAD standards as soon as possible. To meet these highly specific requirements, they will need a form-fill input program sold by an approved software vendor. The software dealers in the appraisal industry are gearing up to make their program output coincide with the UAD requirements, and have it available soon so that appraisers have sufficient time to learn how to use the new UAD format.

The UAD is highly specific about the style, format and presentation of all data entered on the URAR. The biggest change, in my opinion, is that appraisers will no longer be able to use qualifiers such as “poor”, “fair”, “good” or “very good” in their property quality and condition ratings. Under UAD, only six quality ratings are feasible: Q1, Q2, Q3, Q4, Q5 or Q6. Similarly, six precise condition ratings are provided: C1, C2, C3, C4, C5 or C6. Each of these ratings is defined by the UAD guidelines, and appraisers are not permitted to modify them with plus “+” or minus “-” signs, or any other modifier.

Ask Henry

UAD Requirements

Dear H2,

The UAD is scheduled to go into effect September 1st, 2011. What will happen to the UAD requirements if Fannie and Freddie are no longer around in September?

Brent Hodges

Dear Brent,

It's anyone's guess how long Fannie and Freddie will "be around". However, I'm a betting man and will accept reasonable wagers that both of these so-called Government Sponsored Enterprises (GSEs) will be around on September 1, 2011. I might even consider a bet on September 1, 2012.


Ask Henry

UAD: Proper CITY Identification

Dear Mr. Harrison,

I'm having problems defining the address for many properties I appraise. Here in New Jersey we have properties (typically within Townships) that utilize both (1.) "census-designated" areas (or districts) within the township or (2.) names of neighboring towns for use in their "Mailing Address".

For example:

125 Main Street, MORGANVILLE, NJ is in Marlboro Township
125 Main Street, BELLE MEAD, NJ could be in either Hillsborough or Montgomery Township 
125 Main Street, PRINCETON, NJ could actually be in South Brunswick Township (e.g., a different town and county)
I have always written my reports to identify the actual "CITY", "TOWNSHIP"  or "BORO" (as per TAX RECORDS) within the CITY FIELD on the appraisal report.
I have always identified within the ADDRESS FIELD on the appraisal report the "mailing address", which would read as noted above.

ADDRESS: 125 Main Street (Princeton)   CITY: South Brunswick Township

I always include language (in the notes section) as to where I obtained this data, an explanation about census-designated areas or districts within townships, or comments (as in the example above) that the mailing address may utilize the name of a neighboring town.
If an appraiser were to not identify the actual Township, I feel this could be misleading. Especially in the examples used above with both Belle Mead and Princeton: if an appraiser were to only identify "Belle Mead", what actual TOWNSHIP is it in -- Hillsborough or Montgomery?

If an appraiser were to only identify "Princeton", the reader might actually think the property is in Princeton (Mercer County) and not South Brunswick (Middlesex County). Both answers are therefore misleading and incomplete.
Now, AMCs inform me their lender clients want "Princeton" ONLY in the CITY Field. I cannot agree with that. So here comes the question: What is the proper way to do this, and handle my concerns and dilemma with the AMCs? Thanks in advance for your help.

Randy L. Cohen, SCRREA

Dear Randy,

I'm sure it is frustrating to be told to report something that makes no sense, given the complexity of place names in your area. You will no longer have this problem starting September 1st, 2011 when URAR appraisal reports will have to comply with the new UAD requirements. These requirements will become mandatory on that date for all appraisals to be sold to Fannie Mae and Freddie Mac. They will be computer checked and when the computer rejects the appraisal, it will be returned to the lender for corrections. How the corrections will be made and by whom will vary. 

Below is an excerpt from my new UAD book, regarding the UAD requirements on how to report Property Address. It is highly codified, as you will see, and does not permit any deviations from their format. You may have to add your notes about the actual property address versus the mailing address in your addenda, to avoid the problems you outline above. The UAD guide contains a condensation of USPS Regulation 28 which is all you need for most locations. However, in locations like yours, I suggest you contact the postmaster in the area where you are working and get their opinion of the correct address requirements for the location of the subject property.


For more information about my new book, to be published April 30th, and to pre-order a copy now (and get a $5 pre-publication discount), use Discount Code $5PPUAD and click this link:  HARRISON's COMPLETE UAD BOOK (PRE-ORDER) 
UAD URAR page 9

Sound Off

UAD: Unintended Consequences

Dear H2,

UAD is another well meaning step to bring less judgment into an appraisal. The appraisal industry has been the victim of overzealous lending policy with sub-prime loans in excess of 100% of value.

Now the answer to every problem is a computer model. Again, the industry is being manipulated to satisfy a lending industry that is buried in a shadow inventory of bad loans. Lest we forget -- the Univac people were going to 'save NYC' with a computer model. This dismal failure nearly bankrupted the richest city in the country.

As the saying goes, "Numbers have a tendency to lie — and liars tend to number". There is no substitute for good judgment.

For many years we have relied upon reasonably truthful/accurate information from real estate brokers and salespeople, the very information these computer models use to decide upon a value. Years of experience are necessary to be able to read a broker's comments and separate the wheat from the chaff. Now the biggest players (i.e., the biggest
losers) are on the road to an AVM system.
The big AMCs are along for the ride. There will be no "reasonable" fee adjustments. As with most independent appraisers, you either "get on the bus and ride", or get off and starve.

The time, investment, and effort to produce a credible report are not conducive anymore to starting a career in this business. I have never been able to come to terms with the purported importance of an appraisal report that ends up being the least costly portion of a transaction. And then the appraiser is challenged on nearly every issue. Not so long ago, checking a box was supposed to eliminate pages of explanation. Now we are at the UAD with specific answers — of a specified length and format — so that the report can be more easily read or compared to the available AVM!

If you think I'm wrong, just take a look at all the new costly software you are going to need just to keep up. I think appraising has come to a sorry pass indeed.

Joe Johnson
Florida Certified Residential Appraiser

Ask Henry

UAD Updates and Corrections

Dear Henry,

I am going to take advantage of your COMBO offer and order your new Complete UAD Guide and the Illustrated Guide to the URAR form. However...I noticed that the UAD is already being revised. How will you handle that? Will you be emailing updates, blogging about them or what? I realize it is our responsibility to stay up on this; however you might have a great sales tool if you promised to cover all updates on your website or send something by email to us. I have a fear of missing something if it is only up to me to track this monster coming in September! I don't underestimate what a big change this will mean for us appraisers.

Alisa McKeel Willson
CA State Certified Appraiser

Dear Alisa,

You are quite right in assuming that there will be corrections and updates to the UAD instructions. I am putting the final touches on my Complete UAD Guide now. I've already found many inconsistencies between Fannie Mae's Addenda D and Addenda A, which I think they will have to resolve. Other problems will no doubt be uncovered as the UAD is analyzed, considered, added to software packages, and implemented.

Since UAD updates and corrections appear to be a certainty, you'll be glad to know that we do plan to publish all updates to my Complete UAD Guide as they are released, on our Real Estate Valuation Magazine & BLOG. All subscribers will receive email notifications of these changes when they've been posted. (Subscriptions to REV Magazine Online are free. The update link is at the top of the righthand column.)

I'm frankly surprised by how many of our readers seem to be oblivious regarding this major Fannie Mae-Freddie Mac initiative. They apparently do not realize yet just how complex the UAD requirements are, which go into effect for all Fannie Mae & Freddie Mac URAR appraisals with effective dates from September 1, 2011 on.


Interview with Henry S. Harrison

Interview with Henry S. Harrison
by his wife
Ruth Lambert, Editor, Real Estate Valuation Magazine Online

Henry - can you explain to our readers what you are working on now?
Henry (H2): For the past few weeks, we have been very involved with the birth of our 5th grandchild, Sterling Harrison Muchnick, born February 23rd. Now I am back at work on my latest book "Harrison's Complete UAD Guide for the URAR."

What is the UAD? How will it affect appraisers?
According to Fannie Mae and Freddie Mac (aka the GSEs), they "have developed the Uniform Mortgage Data Program (UMDP) to enhance the accuracy and quality of loan data delivered to each GSE. The Uniform Appraisal Dataset (UAD) is a key component which defines all fields required for an appraisal submission on one of four standard appraisal forms, and standardizes definitions and responses for a key subset of fields." What this means is that soon Fannie and Freddie will no longer accept appraisals on paper — only electronic transmissions from the lenders. In addition, they will require that all these appraisals be formatted exactly as delineated in the UAD, or their computers will reject them.