Appraisers must use the most recent version of the appraisal report forms and include any other information, either as an attachment or addendum to the appraisal report form, needed to adequately support the opinion of market value. Although the scope of work for the appraisal or the extent of the appraisal process is guided by Fannie Mae’s appraisal report forms, the forms do not limit or control the appraisal process. The appraiser’s analysis should go beyond any limitations of the forms, with additional comments and exhibits being used if they are needed to adequately describe the subject property, document the analysis and valuation process, or support the appraiser’s conclusions. The extent of the appraiser’s data collection, analysis, and reporting must be determined by the complexity of the appraisal assignment.
Lenders must ensure that appraisal reports are completed on one of the following Fannie Mae forms. The table below provides Fannie Mae’s acceptable appraisal report forms (see Single-Family Forms for a complete list).
|Uniform Residential Appraisal Report (Form 1004)||For appraisals of one-unit properties and units in PUDs (including those that have an illegal second unit or accessory apartment) based on interior and exterior property inspections. Form 1004 also may be used for two-unit properties, if each of the units is occupied by one of the co-borrowers as his or her principal residence or if the value of the legal second unit is relatively insignificant in relation to the total value of the property (as might be the case for a basement unit or a unit over a garage). In addition, appraisals for units in condo projects that consist solely of detached dwellings may be documented on Form 1004, if the appraiser includes an adequate description of the project and information about the homeowners’ association fees and the quality of the project maintenance. Appraisals reported on Form 1004 must be completed in accordance with the UAD Specification.|
|Manufactured Home Appraisal Report (Form 1004C)||For appraisals of one-unit manufactured homes (including manufactured homes in a PUD, condo, or co-op project, and MH Advantage properties) based on interior and exterior property inspections.|
|Individual Condominium Unit Appraisal Report (Form 1073)||For appraisals of one-unit properties in condo projects based on interior and exterior property inspections. Appraisals reported on Form 1073 must be completed in accordance with the UAD Specification.|
|Individual Cooperative Interest Appraisal Report (Form 2090)||For appraisals of one-unit properties in co-op projects based on interior and exterior property inspections|
|Small Residential Income Property Appraisal Report (Form 1025)||For appraisals of two- to four-unit properties (including two- to four-unit properties in PUD, condo, or co-op projects) based on interior and exterior property inspections.|
|Appraisal Update and/or Completion Report (Form 1004D)||For appraisal updates and/or completion reports for all one- to four-unit appraisal reports.|
The exhibits in the following table must accompany the appraisal report. It should be noted that, in addition to these requirements, the appraiser is expected to provide any additional attachments or addenda to the appraisal report necessary to provide an adequately supported opinion of market value.
|Building sketch and calculations||
An exterior building sketch that indicates dimensions and calculations that demonstrate how the estimate for gross living area is derived.
If the floor plan is atypical or functionally obsolete, thus limiting the market appeal for the property in comparison to competitive properties in the neighborhood, Fannie Mae requires a floor plan sketch that includes the interior walls.
For a unit in a condo or co-op project, the sketch of the unit must indicate interior perimeter unit dimensions rather than exterior building dimensions (dimensions and estimates for gross living area shown in the condo documents are acceptable).
Showing the location of the subject property and the comparables that the appraiser used.
Clear, descriptive photographs showing the front, back, and a street scene of the subject property and the front of each comparable. The subject and all comparables must be appropriately identified. Acceptable photographs include original images from photographs or electronic images, copies of photographs from a multiple listing service, or copies from the appraiser’s files.
Photographs of comparable rentals utilized in the Small Income Residential Appraisal Report (Form 1025) are not required.
At a minimum, the report must include photographs of the following:
Note: Interior photographs on proposed or under construction properties may be taken by the appraiser at the time of the inspection for the Certification of Completion, and provided with the Form 1004D.
Appraisal Update and/or Completion Report (Form 1004D)
At a minimum, when completing the Appraisal Update portion of the report, a photograph of the front of the subject property must be included.
Single-Family Comparable Rent Schedule (Form 1007)
Required if the property is a one-unit investment property and the borrower is using rental income to qualify. Otherwise, Form 1007 is not required. (The lender may obtain this form for the purpose of reporting gross monthly rent at delivery. See Reporting of Gross Monthly Rent in B3-3.1-08, Rental Income.)
Each Fannie Mae appraisal report form includes an appraiser’s certification (and, if applicable, a supervisory appraiser’s certification) and a statement of assumptions and limiting conditions. Appraisers may not add limiting conditions.
The appraiser may not make changes or deletions to the existing certifications; however the appraiser may make additional certifications that can be included on a separate page or form. Acceptable additional certifications might include:
those required by state law;
those related to the appraiser’s continuing education or membership in an appraisal organization; or
those related to the appraiser’s compliance with privacy laws and regulations in the development, reporting, and storage of an appraisal and the information on which it is based.
Lenders are responsible for reviewing any additional certifications made by appraisers to ensure that they do not conflict with Fannie Mae’s policies or standard certifications on Fannie Mae appraisal forms.
The appraiser’s certification #23 is an acknowledgment by the appraiser that certain parties to a mortgage finance transaction that are not the lender/client and/or intended user may rely on the appraisal report. This certification clarifies that such other parties include the borrower, another lender at the request of the borrower, the mortgagee or its successors and assigns, mortgage insurers, government-sponsored enterprises, and other secondary market participants.
Fannie Mae will accept the following additional notice or statement when appraisers believe the lender/client is the only intended user:
“The intended user of this appraisal report is the lender/client. The intended use is to evaluate the property that is the subject of this appraisal for a mortgage finance transaction, subject to the stated scope of work, purpose of the appraisal, reporting requirements of this appraisal report form, and definition of market value. No additional intended users are identified by the appraiser.”
The table below provides references to the Announcements that have been issued that are related to this topic.
|Announcement SEL-2019-06||July 03, 2019|
|Announcement SEL-2018-06||August 07, 2018|
|Announcement SEL-2018-05||June 05, 2018|
|Announcement SEL-2014–03||April 15, 2014|
|Announcement SEL-2012–06||June 26, 2012|
|Announcement SEL-2011–10||September 27, 2011|
|Announcement SEL-2011–06||July 26, 2011|
|Announcement SEL-2010–09||June 30, 2010|
|Announcement 08–30||November 14, 2008|