In the recent Fannie Mae newsletter, it was announced that Fannie has expanded eligibility requirements for hybrid appraisals, providing the industry with an additional option. 

Hybrid appraisals include information from a comprehensive property data collection, performed by a trained and vetted third-party property data collector, submitted to the appraiser for the development of a credible opinion of value.

Hybrid appraisals must be completed on the Uniform Residential Appraisal Report (Hybrid) (Form 1004 Hybrid) or the Individual Condominium Unit Appraisal Report (Hybrid) (Form 1073 Hybrid).

Loans that are eligible for a hybrid appraisal option will be communicated through Desktop Underwriter (DU).

Eligible property and transaction types will closely align with those for traditional appraisals but will not include certain property and transaction types, including the following:

• Two- to four-unit, co-op and manufactured homes;
• Construction to permanent financing, HomeStyle Renovation and HomeStyle Energy loans; or
• Proposed construction properties. The lender must obtain the property data collection in compliance with the Uniform Property Dataset and submit it to Fannie Mae’s Property Data API prior to loan delivery in accordance with the Selling Guide.

A DU message will specify on the DU Underwriting Findings Report if a loan is eligible for the hybrid appraisal option.

DU version 12.0 will be updated the weekend of March 22 to include messaging specifying eligibility for a hybrid appraisal.