Selling Guide

Published September 01, 2021

For best results, pose your search like a question.

Guide Resources

For a comprehensive list of resources such as forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

Customers Recommend Ask Poli

AskPoli

If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

Launch Ask Poli  

Download PDF Guide

You can also download the printable 1,200+ page PDF, which include links.

Download Now

B4-1.2-02, Appraisal Age and Use Requirements (07/07/2021)

Introduction

This topic contains information about the following:

 

Age of Appraisal and Appraisal Update Requirements

When an appraisal is obtained, the property must be appraised within the 12 months prior to the date of the note and mortgage.

When the effective date of the original appraisal report is more than four months but less than 12 months from the date of the note and mortgage, the appraiser must perform an appraisal update that includes inspecting the exterior of the property and reviewing current market data to determine whether the property has declined in value since the date of the original appraisal report.  This policy applies regardless of whether the property was appraised as proposed or existing construction. The appraisal update must occur within four months prior to the date of the note and mortgage.

The original appraiser should complete the appraisal update; however, lenders may use substitute appraisers. When updates are completed by substitute appraisers, the substitute appraiser must review the original appraisal report and express an opinion about whether the original appraisers opinion of market value was reasonable on the date of the original appraisal report. The lender must note in the file why the original appraiser was not used. 

The inspection and results of the appraisal update must be reported on the Appraisal Update and/or Completion Report (Form 1004D).

  • If the appraiser indicates on the Form 1004D that the property value has declined, then the lender must obtain a new appraisal for the property.

  • If the appraiser indicates on the Form 1004D that the property value has not declined, then the lender may proceed with the loan in process without requiring any additional fieldwork.

When the effective date of the original appraisal report is more than 12 months from the date of the note and mortgage (with or without an appraisal update) a new appraisal report is required. Except for certain single-close construction-to-permanent financing loans, these policies apply to all appraisals including those that receive appraisal and value representation and warranty enforcement relief (see  B5-3.1-02, Conversion of Construction-to-Permanent Financing: Single-Closing Transactions).

See B4-1.3-12, Quality Assurance, for information concerning changes to the appraised value. See B2-1.5-02, Loan Eligibility, for information regarding property valuation requirements for mortgage loans sold to Fannie Mae more than four months from the note date.

 

Multiple Appraisals of the Subject Property

If the lender obtains more than one appraisal for a loan due to applicable law, regulation, lender policy, or otherwise, the lender must

  • adhere to a policy of selecting the most reliable appraisal rather than the appraisal that states the highest value,

  • document the reasons for relying on the appraisal, and

  • submit the appraisal selected by the lender through the UCDP prior to delivery.

These requirements also apply if the lender considers an appraisal to be deficient (see B4-1.3-12, Quality Assurance).

 

Use of an Appraisal for a Subsequent Transaction

Fannie Mae will allow the use of an origination appraisal for a subsequent transaction if the following requirements are met:

  • The subsequent transaction may only be a Limited Cash-Out Refinance.

  • The age of the appraisal report must be less than 12 months from the note date of the subsequent transaction. If the appraisal report is greater than four months from the date of the note and mortgage, then an appraisal update is required. See preceding section, Age of Appraisal and Appraisal Update Requirements, for requirements for completing an appraisal update.

  • The lender must ensure that the property has not undergone any significant remodeling, renovation, or deterioration to the extent that the improvement or deterioration of the property would materially affect the market value of the subject property.

  • The borrower and the lender/client must be the same on the original and subsequent transaction.

Note: The appraisal must comply with all other requirements in the Underwriting Property section of the Selling Guide.

The table below provides references to the Announcements that have been issued that are related to this topic.

Announcements Issue Date
Announcement SEL-2021-06 July 07, 2021
Announcement SEL-2018-05 June 05, 2018
Announcement SEL-2016–08 October 24, 2016
Announcement SEL-2014–03 April 15, 2014
Announcement SEL-2013–03 April 9, 2013
Announcement SEL-2011–06 July 26, 2011
Announcement SEL-2011–03 March 31, 2011
Announcement SEL-2010–09 June 30, 2010
Announcement 09–19 June 8, 2009

 

Have You Tried Ask Poli?

Poli knows. Just ask.

Ask Poli features exclusive Q&As and
more—plus official Selling & Servicing
Guide
content.

Try Ask Poli

Related Articles


AskPoli

Customers Recommend Ask Poli

If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

Guide Resources

For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

X
Having Issues with Seeing this Page Correctly?

Use Firefox or Chrome   How to do a hard refresh in Internet Explorer
We recommend that you use the latest version of FireFox or Chrome.

Download Firefox
Download Chrome
  A hard refresh will clear the browsers cache for a specific page and force the most recent version of a page.
    Hold the Ctrl key and press the F5 key.
     

Email Us
If you still have Technical Support questions, feel free to emailAsk_Poli@fanniemae.com.