Selling Guide

Published June 3, 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.

View All Selling Policy Updates

Download PDF

Hint: Ask in a form of a question.

For best results, pose your search like a question.

B4-1.4-05, Leasehold Interests Appraisal Requirements (04/15/2014)


This topic contains information on special appraisal considerations for properties subject to leasehold interests, including:


A mortgage that is secured by a leasehold estate or is subject to the payment of “ground rent” gives the borrower the right to use and occupy the real property under the provisions of a lease agreement or ground lease, for a stipulated period of time, as long as the conditions of the lease are met. When the lease holder is a community land trust, there may be significant restrictions on both the purchase and resale of the property. For more information on appraising this type of leasehold, see B4-1.4-06, Community Land Trust Appraisal Requirements.

Note: Manufactured housing located on leasehold interest properties is ineligible for delivery to Fannie Mae.

Appraisal Requirements for Leasehold Interests

The appraisal requirements for leasehold interest properties are as follows:

  • Appraisers must develop a thorough, clear, and detailed narrative that identifies the terms, restrictions, and conditions regarding lease agreements or ground leases and include this information as an addendum to the appraisal report.

  • Appraisers must discuss what effect, if any, the terms, restrictions, and conditions of the lease agreement or ground lease have on the value and marketability of the subject property.

Comparable Selection Requirements for Leasehold Interests

When there are a sufficient number of closed comparable property sales with similar leasehold interests available, the appraiser must use the property sales in the analysis of market value of the leasehold estate for the subject property.

However, if not enough comparable sales with the same lease terms and restrictions are available, appraisers may use sales of similar properties with different lease terms or, if necessary, sales of similar properties that were sold as fee simple estates. The appraiser must explain why the use of these sales is appropriate, and must make appropriate adjustments in the Sales Comparison Approach adjustment grid to reflect the market reaction to the different lease terms or property rights appraised. See B4-1.3-08, Comparable Sales, for general requirements regarding comparable selection.

Have You Tried Ask Poli?

Poli knows. Just ask.

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

Try Ask Poli

Related Articles

B4-1.4-01, Factory-Built Housing: Manufactured Housing (10/02/2018)

IntroductionThis topic contains information on manufactured housing appraisal requirements, including: Overview  Manufactured Housing Appraiser...

Read more

B4-1.4-02, Factory-Built Housing: Modular, Prefabricated, Panelized, or Sectional Housing (04/15/2014)

IntroductionThis topic contains information on special appraisal considerations for modular, prefabricated, panelized, or sectional housing, including:...

Read more

B4-1.4-03, Condo Appraisal Requirements (04/15/2014)

IntroductionThis topic contains information on special appraisal considerations for units located in condo projects, including: Overview  Appraisal...

Read more

Have guide questions? Get answers to all of your policy questions, straight from the source.

Get Started
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