I am curious why the lender would ask for another appraisal. Usually if the lender questions the appraisal they will ask for additional comps to support the stated value. The purchase and sale agreement used by local realtors covers FHA financing and states that the purchaser is not obligated to complete the purchase if the appraised value comes in below a specified dollar amount (usually the agreed upon price) but has the privalege and option of proceeding. The FHA loan gurantee amount will be based on the appraised value so if the purchaser decides to proceed with the purchase as written they will have to have the means to pay you the difference in cash. I don't believe the FHA will allow a second lien but I suggest you consult with a mortgage lender to be certain. - Mon Dec 7 2009, 06:30