Earlier, Fannie Mae composed a lender letter regarding the impact of COVID-19 on appraisers. Recently, Fannie Mae made some updates to this document.
“We have updated Lender Letter LL-2020-04, ‘Impact of COVID-19 on Appraisals,’ to include flexibilities for new construction and HomeStyle Renovation loans, including detailed documentation requirements to be provided to the appraiser,” Fannie Mae said in a release. “We’ve also removed language on appraisal type preference from page four, clarifying flexibilities available to lenders.”
In addition to updating the lender letter, Fannie also updated and added to its FAQs to further inform appraisers.
“We’ve noticed some ineligible appraisals coming in, due to confusion between desktop and exterior-only appraisals and the forms they can be completed on,” Fannie Mae said.
For the updated version, go to Lender Letter LL-2020-04, Impact of COVID-19 on Appraisals.
Here are a few examples from Fannie’s added FAQs surrounding appraisals and Covid-19.
Question: May a desktop or exterior-only inspection appraisal report completed using the appraisal flexibilities offered by Lender Letter LL-2020-04, Impact of COVID-19 on Appraisals, include photos or other information provided by the borrower/owner?
Answer: Yes. Consistent with USPAP, appraisers are permitted to consider and develop any information deemed credible. It is important to note, certification No. 10 has been removed in recognition that the appraiser may have relied on information from an interested party to the transaction (borrower, realtor, property contact, etc.) and additional verification may not have been possible.
Question: What if adequate information is not available for the appraisal?
Answer: Appraisers may use information in MLS, reach out to the broker, homeowner, public records, and/or other online tools such as satellite imagery and street views to obtain the necessary property information. A good-faith effort should be used to provide information that the appraiser believes is reasonable. If adequate information about the subject property is not available, the mortgage will not be eligible for sale to us until the appraiser has sufficient information to complete the desktop appraisal or an appraisal with an exterior-only inspection.
For the complete listing of the Fannie Mae FAQs surrounding appraisals and the coronavirus, go to FAQs.