As the COVID-19 situation continues to unfold, users of appraisal services are continuing to issue updated guidance and information to appraisers.
Fannie Mae issued an update to Lender Letter 2020-05 on March 31, 2020. For appraisers, probably the most significant revision to their guidance was the removal of the “order of preference” for appraisal types. Formerly, the guidance had stated that a full interior inspection appraisal was preferred over a desktop appraisal or an exterior-only inspection appraisal. Language specifying the order of preference has been removed from the Lender Letter, which means appraisers may see fewer requests for full interior inspections on properties that are occupied. However, the actual effect of this revision remains to be seen, as many appraisers are reporting on social media that some lenders continue to insist on full interior inspections in all assignments.
Fannie Mae has also produced a video titled Appraisal Report Instructions for COVID-19 Flexibilities, which is available on Fannie Mae’s Appraisers Page. This relatively brief and well-produced video provides a clear summary of Fannie Mae’s expectations when reporting a desktop or exterior-only inspection appraisal under the temporary appraisal flexibility measures.
HUD has issued its own updated guidance regarding FHA loans and appraisals, in the form of an FAQ page on its website that was most recently updated on April 1, 2020. Many of the FAQs on this page are more applicable to originating lenders, but there are several questions and answers that are of importance to appraisers. This page has been updated twice since it was originally created on March 18th, so further updates can be anticipated. Appraisers may wish to bookmark this page and check it every few days for new and/or updated guidance.
Written by Dan Bradley. Daniel A. Bradley, SRA, CDEI is the Director of Online Appraisal Curriculum for McKissock Learning. He has been a practicing real property appraiser since 1987, and has been instructing and authoring appraisal courses since 1992. He is a state certified general appraiser in Pennsylvania and is currently on the FHA appraiser roster. From 2004 to 2013, Dan was a member of the Pennsylvania State Board of Certified Real Estate Appraisers, serving for five years as vice-chairman and three years as chairman. He has also has served as a contracted expert witness appraisal reviewer for the Pennsylvania Department of State.