Fannie Mae is the leader for Appraisal Standards. Freddie always follows suit and the Federal Home Loan Bank (FHLB) uses Fannie’s Standards. So when Fannie changes an appraisal requirement the industry changes.
On April 15, Fannie changed its Selling Guide to reflect changes in appraisal updates, photo’s and comparable sales. Significant changes were also made to re-titling and reorganization of content that, hopefully, will make searching for specific information easier.
Some of the changes are:
- An appraisal update now is required to include a photo of the front of the subject so interior inspection can be validated. These updates must be completed on the Appraisal Update and/or Completion Report (Form 1004D).
- An explanation is no longer needed when using comparable sales that are more than six months old.
- An example was also provided in the Selling Guide that illustrates when it might be appropriate to use older sales with proper time adjustments instead of a more recent but dissimilar sale. The important part to this is proving a time adjustment in order to reflect any changing market conditions.
- When an addition is identified there are additional requirements now to be aware of.
The complete details are outlined in Fannie’s Selling Guide Announcement SEL-2014-03.