Answer
The FHA appraisal validity period is 120 days for existing, proposed or under construction properties. If the HOC determines that soft market conditions exist in certain areas or markets, it may shorten the term of appraisals for substantial rehabilitation upon advance notice to lenders.
The term of the appraisal begins on the day the home is inspected by the FHA appraiser and this date appears on the appraisal report.
If a sales contract is signed or the borrower is approved for a loan prior to the appraisal expiration date, the appraisal term may be extended by the lender for 30 days to allow for loan closing.
Approval occurs when the lender DE underwriter signs the FHA Loan Underwriting Transmittal Summary, Form HUD-92900-LT. The loan must close within 150 days (120 day validity period for original report plus 30 day extension), if the appraisal has not been updated with an Appraisal Update Report (Fannie Mae 1004D/Freddie Mac 442) as set forth in Handbook 4155.2 (Mortgagee Letters 10-13 and 09-51).
If the appraisal has been updated via an Appraisal Update Report, the loan must close within 240 days (120 day validity period plus 120 day validity period for the Appraisal Update Report). The appraiser must include a Market Conditions Addendum (Fannie Mae Form 1004MC/Freddie Mac Form 71) reflecting market conditions as of the effective date of the Appraisal Update Report.
The appraisal may only be updated one time via the Appraisal Update Report and may not be used by a lender who is not the intended user in the original appraisal report unless the appraiser incorporates the original report by attachment rather than by reference per Advisory Opinion 3 of the USPAP. The 30 day extension is not allowed when the appraisal is updated with an Appraisal Update Report.

Handbook 4155.2. 4.4.d
MLs: 10-13, 09-51, 09-30