FHA announces updates to Catalyst software’s appraisal module

The Federal Housing Administration (FHA) announced on Friday that it has updated the Electronic Appraisal Delivery (EAD) module of its Catalyst software platform, following initial agency efforts to require appraisal submissions on the platform before it walked them back.

“This past weekend, [FHA] completed the implementation of new functionality in the FHA Catalyst: [EAD] module that eliminates the U.S. Department of Housing and Urban Development’s (HUD) reliance on its legacy appraisal processing system, the Loan Application Management System,” FHA said in an informational notice.

The update “lays the foundation for the modernization of FHA’s appraisal data storage, dissemination, and analytical capabilities,” the agency said, aligning them with guidance from Mortgagee Letter (ML) 2022-19 which is “now superseded in full by the Single Family Housing Policy Handbook 4000.1.”

FHA had previously outlined a plan that would require appraisal submissions through the EAD module in 2021, but it said in September 2022 that it had chosen to reassess the module. The agency cited a need to take a closer look at the development and implementation of this part of the platform to streamline its efficiency.

It ultimately rescinded the submission requirement with the publication of ML 2022-19. The agency also discontinued “the onboarding of new mortgagees and all activities related to integrating with FHA Catalyst: EAD Module,” the agency said at that time.

A new mandatory use date has not been issued.

Catalyst has been seen as a positive development in the ongoing effort to modernize the technology infrastructure of the federal housing agencies.

It was expected that the incorporation of Catalyst would allow other obsolete systems to be retired or consolidated, saving taxpayers millions of dollars, according to a HUD Office of the Inspector General (OIG) report released in 2021.

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