Fannie Mae recently released new appraisal-related policies and additional guidance addressing many of the primary concerns that home builders have raised with the agency regarding inappropriate appraisal practices.
According to its new policy, Fannie Mae will now require lenders to only use appraisers who have the appropriate knowledge and experience in specific geographic markets. Also, builder sales are acceptable as comparable properties, and an appraiser may view the HUD-1 for a new construction property to verify a recent sale not yet available through other data sources.
Meanwhile, Fannie Mae is requiring appraisers to make valuation adjustments for short sale and foreclosed properties used as comps by determining their condition and whether any stigma is associated with them. Other changes announced by Fannie Mae clarify that the Home Valuation Code of Conduct allows for appropriate communication with appraisal management companies and specific appraisers and also allows for authorized third parties, including builders, to provide additional information about the basis for a valuation or the need to correct objective factual errors in an appraisal report.