Q16. What type of properties are to be analyzed for the data reported in the One-Unit Housing Trends portion of the Neighborhood section of the appraisal report form?
The data regarding trends to be reported in the One-Unit Housing Trends section must be reflective of those properties deemed to be competitive to the property being appraised. Additional commentary should be provided on the other segment(s) of the neighborhood.
Q17. Are the trends that are reported on the Market Conditions Addendum to the Appraisal Report (Form 1004MC) the same trends that are to be reported in the One-Unit Housing Trends section of the appraisal report (Form 1004)?
Yes. The conclusions regarding trends that are obtained from the Form 1004MC must be the same trends reported in the Neighborhood trends section of the Form 1004. The information reported on both forms must be consistent to provide the lender with a clear and accurate understanding of the market trends and conditions present in the subject neighborhood, based on properties that are considered competitive with the subject being appraised.
Q18. Are properties that are identified as having an over-improvement eligible for sale to Fannie Mae?
Yes. Improvements can represent an over-improvement for the neighborhood, but still be within the neighborhood price range. Lenders must review appraisals on properties with over-improvements that might not be acceptable to a typical purchaser to ensure that the appraiser has adequately commented on the over-improvement and that only their contributory value is reflected in the appraisal analysis.
Q21. Will Fannie Mae lend on a property where the utilities were not turned on at the time of the appraisal inspection?
Yes. Fannie Mae does not require that the utilities that serve the property be turned on at the time of the inspection. Fannie Mae requires that the utilities meet community standards.
Q25. Is there a required number of comparables that the appraiser must provide when appraising a one-unit property with an accessory unit?
Yes. If the accessory unit is legal, the appraiser is required to provide at least one comparable property with the same use to demonstrate the improvements are typical for the local market. If the accessory unit is illegal, the appraiser must provide three comparables with the same non-compliant zoning use to demonstrate the improvements are typical for the local market.
Q26. If the subject property features an unpermitted addition, can the square footage of the unpermitted addition be included in the total gross living area reported on the appraisal report?
If the appraiser has identified an addition(s) that does not have the required permit, the appraiser must comment on the quality and appearance of the work and assess the impact, if any, on the market value of the subject.
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