Fannie Mae recently announced updates for appraisers regarding its Lender Letter (LL-2020-04) for all Fannie Mae Single-Family Sellers and the impact of COVID-19 appraisals.
In its recent Q&A update for appraisers, the question was posed: When using the appraisal flexibilities provided in LL-2020-04, may appraisers make assumptions concerning relevant characteristics of the subject property, such as interior condition, without a data source?
“No,” Fannie replied. “When completing an exterior-only or a desktop appraisal the appraiser must have a data source for all relevant characteristics, including interior condition, and reference the source used in the report. For example, it is unacceptable to assume the condition of the property is ‘average’ or ‘similar to the exterior of the home.’
“The Appraiser’s Certifications, approved for use with desktop and exterior-only appraisals prepared using the COVID-19 flexibilities, require the appraiser to report the condition of the improvements in factual, specific terms. The appraiser may rely on subject property information from third-party data sources,” Fannie Mae added.
This new update took effect Nov. 13, and as previously communicated in LL-2020-04 and COVID-19 FAQs, if there is insufficient information about the property to complete the appraisal assignment, the mortgage is not eligible for sale to Fannie Mae.