Fannie Mae's Recent Appraisal Guideline Updates
It's important to note that these updated Fannie Mae guidelines/points are NOT necessarily the policies of Lenders, Banks, and other entities ... and can NOT be applied universally for every scenario or every transaction.
For instance: It's been common practice for Appraisers to use Comparable Sales within 6 months of the appraisal date.
Fannie Mae states that it is acceptable to consider and include a sale from OVER 12 months ago, as it MAY be more appropriate than other more recent sales, which are actually less similar to the Subject Property. The Appraiser must provide an adequate explanation and support for using such a sale ... and of course, reflect any increases or decreases in value (if any) from that time period to the present.
Please keep this in mind when transacting in smaller communities or rural locations where the number of recent and truly similar comparable sales are limited.
In this extreme case where appropriate, such as smaller housing markets or rural locations, it's also allowable for an Appraiser to use Comparable Sales and Listings located OVER one mile away. But those sales and listings must be thoroughly and satisfactorily explained to Underwriters however.
In rare and extreme cases: Appraisers can actually use and adjust for sales that otherwise are not truly comparable. Again, in those instances the Appraiser must fully-explain those Comparables as the best and most appropriate available at the time the Appraisal is performed.
Also keep in mind: Guidelines have been put in place to address the comparability of sales by measuring the percentage of dollar adjustments made by the Appraiser to and from the respective Sales Prices of the Comparables.
New Information Available: Fannie Mae will okay a loan on a property where the utilities were not turned-on at the time of the Appraisal. However: Lenders, Banks, End Lenders, or others involved in the transaction MAY insist on the utilities to be turned-on and noted to be functional. There is no one answer to this question or issue.
Please consult your Lender for guidance ...
* For answers to Mortgage questions and Mortgage assistance in the Chicago-area, please contact me. I'll put my 37 years of Mortgage experience and expertise hard to work on your (or your clients') behalf.
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