Selling Guide

Published April 1, 2020

The Selling Guide is organized into parts that reflect how lenders generally categorize various aspects of their business relationship with Fannie Mae. To begin browsing, select from any of the sections below. You may also download the entire Selling Guide in PDF format.

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During the pandemic, is a traditional appraisal required when purchasing a new construction property that has never been occupied?

Note: This information comes from the published Lender Letter, LL-2020-04, Impact of COVID-19 on Appraisals. 

Flexibilities for New Construction Loans

For new construction properties where the appraisal is “subject to completion per plans and specifications,” and also when the property is 100% complete but an interior and exterior inspection appraisal cannot be completed, we will permit a desktop appraisal on the forms identified in the below table. Lenders must adhere to the LTV ratio requirements in Temporary appraisal requirement flexibilities, including the requirement that second homes with LTV ratios above 85% require a traditional appraisal. These requirements apply to purchase transactions only and exclude all construction-to-permanent loans. 

Property Type Acceptable Appraisal Form
One-unit property, including a unit in a planned unit development (PUD) or a detached condominium unit Uniform Residential Appraisal Report (Form 1004)
Condominium unit Individual Condominium Unit Appraisal Report (Form 1073)
Cooperative unit Individual Cooperative Interest Appraisal Report (Fannie Mae Form 2090)
Two- to four-unit property Small Residential Income Property Appraisal Report (Form 1025)
Manufactured home Manufactured Home Appraisal Report (Form 1004C)

To accommodate the desktop appraisal on the existing Fannie Mae forms, the revised scope of work, statement of assumptions and limiting conditions, and certifications must accompany the form. Additionally, the appraiser must identify a desktop appraisal was performed by populating the Map Reference field on the appraisal with “desktop.”

Documentation requirements for new construction loans

If construction of the property has not yet begun or is partially complete, and the appraisal report will be completed “subject to completion per plans and specifications,” the lender must provide the appraiser with, or ensure that the builder has provided the appraiser with the following:

  • Plans and specifications
  • Survey and/or plot plan
  • Current photos of the subject property
  • If construction has not yet begun, a photograph of the site and down the street in both directions
  • If construction is partially complete, a photograph is required of the following:
  • A front view of the subject property
  • A rear view of the subject property
  • A street scene (i.e., a photograph down the street in both directions)
  • The following interior photos are required when construction is at a stage in which they are available
  • The kitchen of the subject property
  • All bathrooms of the subject property
  • The main living area of the subject property
  • Basement, including all finished rooms
  • A copy of the complete, ratified sales contract, and all addenda 

If construction of the property is 100% complete, and the appraisal report will be completed “as is,” the lender must provide the appraiser with, or ensure that the builder has provided the appraiser with the following:

  • Plans and specifications
  • Survey and/or plot plan
  • Current photos of the subject property
  • A front view of the subject property
  • A rear view of the subject property
  • A street scene (i.e., a photograph down the street in both directions)
  • The kitchen of the subject property
  • All bathrooms of the subject property
  • The main living area of the subject property
  • Basement, including all finished rooms
  • A copy of the complete, ratified sales contract, and all addenda 

Builder certification

The lender must obtain a signed Builder Certification attesting that the information provided is true and correct. This certification must be included in the loan file.
 

Completion reports for new construction properties

For new construction properties where the appraisal report was completed “subject to completion per plans and specifications,” if the lender is unable to obtain a completed Appraisal Update and/or Completion Report (Form 1004D) as a result of COVID-19 related issues, we will accept the Completion of Construction Certification.

 

For additional information, refer to the published Lender Letter LL-2020-04, Impact of COVID-19 on Appraisals.

 

 

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