Since announcing two new appraisal forms in July, Fannie Mae has received questions pertaining to whether Form 1004 Desktop should be used when completing an appraisal with COVID-19 appraisal flexibilities. The answer is no, as outlined in the recent Fannie Mae Appraiser Update.
The government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, have created two new Uniform Appraisal Dataset (UAD)-aligned appraisal forms: the 1004 Desktop and the 1004 Hybrid. The Uniform Collateral Data Portal (UCDP) was updated on July 26 to receive these new forms, and they are available through several appraisal forms vendors, the Fannie Mae newsletter stated.
Previously, Fannie explained that the GSEs were tasked by the Federal Housing Finance Agency (FHFA) with exploring appraisal modernization.
“Today’s Uniform Residential Appraisal Report (URAR) Scope of Work, Limiting Conditions, and Certifications do not accommodate alternative appraisal processes,” Fannie said in its newsletter. “With FHFA’s permission, the GSEs aligned on modified Scopes of Work, Limiting Conditions, and Certifications in these new forms, enabling the GSEs to separately explore alternative appraisal processes. What’s important to know is that the 1004 Desktop and 1004 Hybrid are not Selling Guide-compliant, meaning lenders cannot deliver loans to us with appraisals on the new forms unless the lender has a formal agreement to participate in our appraisal modernization testing.
“Consequently, you may not use these new forms unless specifically instructed by your client. The number of participating lenders and appraisal volume in our test is small, so most appraisers will see few, if any, of these appraisal assignments,” Fannie added. “The 1004P discussed in the previous newsletter will be phased out and replaced by the new forms.”
Fannie Mae anticipates there may be confusion with the “desktop appraisal” option for COVID-19 and the 1004 Desktop. They are not interchangeable, however. First, Fannie did not create new forms for the COVID-19 flexibilities because they are temporary. It takes time to create new forms with the work on that beginning with the 1004 Hybrid and 1004 Desktop in 2018.
“But we needed a fast, flexible solution to react to the pandemic’s rapidly changing circumstances,” Fannie stressed in the newsletter. “So, we created mandatory disclosures for appraisers to make within existing UAD forms. Second, the COVID-19 certifications do not include Certification 10 so that you can utilize information from interested parties when other data sources aren’t available due to mobility restrictions or social distancing.
“Conversely, in our modernization testing, we expect appraisers to have an independent source — that is, Cert 10 remains in effect,” Fannie Mae added. “We encourage you to make a side-by-side comparison of the variations in the disclosures so you are comfortable with your obligations under each. Lastly, we track the appraisal reports differently. We track COVID-19 appraisals using the terms ‘desktop’ or ‘exterior’ in the Map Reference field, while we use the new data elements to track the new forms.”