On December 15, 2021, Fannie Mae issued Announcement SEL-2021-11 which heralded a number of changes that were made to its Selling Guide. Several of the changes are aimed at underwriters and do not affect appraisers; however, there is one significant change for appraisers that will change the way they inspect properties in the not-so-distant future.
As of April 1, 2022, Fannie Mae will require appraisers to measure subject property improvements using ANSI Standard Z765-2021. According to the Announcement, “Appraisals requiring interior and exterior inspections must follow this standard; appraisals of this type performed without using this standard will not be acceptable.”
The American National Standards Institute (ANSI) revised its Z765 Standard early in 2021; previous versions of this standard should not be used. Appraisers should note that ANSI Z765 applies only to single-unit (single-family) residences. Also, ANSI Z765 must be used in its entirety; an appraiser is not permitted to pick and choose which part or parts of the standard to use.
ANSI Z765 is a copyrighted document; a downloadable PDF is available for purchase from Home Innovation Research Labs for $25.00. The website can be accessed here: https://www.homeinnovation.com/z765.
Appraisers may begin using ANSI Z765-2021 immediately but are not required by Fannie Mae to do so until April 1, 2022. To prepare appraisers for using this standard, McKissock is offering a live stream course titled Measuring 1-4 Unit Residential Properties with ANSI Z765 Standard.
An additional appraisal-specific change to the Selling Guide addresses the selection of comparable sales in a new or recently converted condo project or subdivision. A link to the Announcement may be found here.