Earlier this week, Fannie Mae issued a new edition of its Appraiser Update e-newsletter; this edition was titled Special Edition for Rural Appraisal.
The newsletter covers several topics of interest to rural appraisers, including a summary of recent changes to Fannie Mae’s policies, information about Fannie’s MH AdvantageTM program, and an article entitled “Rural Round Up,” which provides appraisers with “some reminders to help with appraisals of rural properties.”
This article provides guidance on a number of issues that affect rural appraisers, including highest and best use, standards for comparable selection, data sources, adjustments, the cost approach, and reconciliation.
Some of the highlights include:
- Fannie Mae recognizes that appraisers in rural areas may need to expand their sale search parameters geographically or by date of sale.
- Appraisers must have access to necessary data and verification sources for the subject property’s location. Fannie Mae states that appraisers may not accept assignments in areas where they do not have access to the common and customary data sources.
- Acceptable methods of supporting adjustments, according to Fannie Mae, include paired sales, regression, prior sale of the subject, depreciated cost, and conversations with market participants.
- The indicated value by sales comparison approach is required by Fannie Mae to be within the range of adjusted sale prices of the comparables included in the appraisal report.
You can read the full newsletter here: https://www.fanniemae.com/content/news/current-appraiser-newsletter.pdf.
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.