u/OldeMeck

Converting from FHA to Conventional is a change in intender user, and requires this to be approached as a new assignment. Does a new assignment automatically require a new inspection?

I've searched the sub and found this asked about a year ago, with the answers seeming to all say that yes, "clone" report, scrub the old report, add new pics, charge an acceptable fee, etc.

I did a FHA appraisal last week, and now the Client is asking for it to be converted to Conventional, remove the FHA required repairs, gave me a 24 hour turnaround, and $110. I responded stating this was a new assignment for a new intended user, which requires a new inspection and I'm not available to get that done in their timeframe.

Client responded and said "You may consider this a new assignment for your purposes.  However, the lender is not bound by USPAP and considers this an update to the original assignment. You would be in compliance with USPAP by invoking the original Effective Date and disclosing the prior assignment. You are allowed to invoke the original Effective Date, disclose the prior appraisal service, and state the update is per the lender's request without violating USPAP.  Respectfully, if you believe that USPAP does not allow this, you are welcome to provide the USPAP Standard, AO, or FAQ supporting that for review."

USPAP '26 FAQ 171 does confirm that this is new assignment, but USPAP doesn't even require a physical property inspection. I cannot find any information about "invoking the original Effective Date." FAQ 171 does say "for the new assignment, recognize that if you obtained any information as a result of your inspection of the subject property for FHA purposes, you would have to disclose the results of that inspection, even if it were a more thorough inspection than would be required for conventional financing. For example, if you noted roof problems because you entered the attic when performing your inspection for FHA, you would be obligated to disclose those same results, even if you wouldn't typically access an attic when inspection the subject property for conventional financing." So the Client asking me to "remove any FHA required repairs" seems sketchy and would violate my USPAP obligation.

tl;dr: am I in the clear? or is the Client spouting bullshit and trying to fleece me? Am I USPAP compliant to "consider this a new assignment for my purposes (they did send a new engagement letter), use the same photos from the original inspection, remove FHA verbiage, disclose prior service, and resubmit this report with the same Effective Date?