Urgent: Updated Fannie Mae Guidelines Announcement - August 15, 2014
by Dallas Appraiser L.L.C. on 08/19/14
Urgent: Updated Fannie Mae Guidelines Announcement
Fannie Mae conducted a comprehensive review of the Property Eligibility (B2-3) and Appraisal Requirements
(B4-1) chapters of the Selling Guide. As a result of that review, new policies have been developed, current
policies have been clarified, and additional guidance has been incorporated. Further, significant changes to the
organization of both chapters have been made. In some cases, topics and paragraphs have been re-titled and
content has been reorganized with the expectation that searching for specific information will be much easier.
The clarifications are a result of internal reviews, frequently asked questions, and the analysis of Uniform
Appraisal Dataset (UAD) data. Additional guidance has been incorporated into the Selling Guide to help
lenders in their underwriting of appraisals.
The new and updated policies are described in the table below. In addition, there is an Attachment to this
Announcement that summarizes the clarifications and additional guidance that have been incorporated into the
Selling Guide. Lenders should carefully review the language in the Selling Guide for the specific changes that
are being made to ensure a full understanding of the requirements.
Selling Guide Topics New or Updated Policies
Chapter B2-3, Property Eligibility
B2-3-01, General Property
Eligibility
- The list of properties that are not eligible for acquisition by
Fannie Mae has been updated to include boarding houses
and bed and breakfast properties.
B2-3-02, Special Property
Eligibility and Underwriting
Considerations: Factory-Built
Housing
- Added the requirement that a manufactured housing unit
must not have been previously installed (or occupied at any
other site or location), except from the manufacturer or the
dealer’s lot as a new unit.© 2014 Fannie Mae. Trademarks of Fannie Mae. SEL-2014-03 Page 2
Selling Guide Topics New or Updated Policies
Chapter B2-3, Property Eligibility
- Provided an alternative to the requirement for an original
HUD Certification Label/Data Plate for a manufactured
home.
- Added that manufactured homes that have an addition or
have had a structural modification are eligible under certain
conditions.
B2-3-03, Special Property
Eligibility and Underwriting
Considerations: Leasehold
Estates
- Revised the policy that required the lender to contact Fannie
Mae before approving a lease. The expectation is that the
lender has confirmed the lease meets the requirements
outlined in the Selling Guide.
B2-3-04, Special Property
Eligibility Considerations
- Added an exception to the requirement that properties with
multiple parcels must be adjoined in order for the loan to be
eligible for delivery.
- The multiple parcels policy has been revised to provide
flexibility. Each parcel is no longer required to have
residential zoning - rather each parcel must have the same
basic zoning (e.g., residential, agricultural).
Selling Guide Topics New or Updated Policies
Chapter B4-1, Appraisal Requirements
B4-1.2-01, Appraisal Report
Forms and Exhibits
- Added the requirement that a front photograph of the subject
must be taken when completing the Appraisal Update portion
of the Appraisal Update and/or Completion Report (Form
1004D) to validate that the appraiser has inspected at least
the exterior of the property when he or she performed the
appraisal update.
B4-1.2-02, Appraisal Age and
Use Requirements
- When an appraisal update is required, it must be reported on
the Appraisal Update and/or Completion Report (Form
1004D).
- Fannie Mae will allow the use of an origination appraisal for a
subsequent transaction if certain requirements relating to the
transaction type, age of the appraisal, and continuity of
ownership and the lender are met, and there is no change to
the property condition impacting the market value of the
property.
B4-1.3-05, Improvements Section
of the Appraisal Report
- Information related to Fannie Mae’s acceptance of unique
property types has been provided.
- The definition/characteristics and the eligibility of an
accessory dwelling unit have been provided.
- If the appraiser identifies an addition(s) that does not have
the required permit, the appraiser must comment on the
quality and appearance of the work and its impact, if any, on
the market value of the subject property. © 2014 Fannie Mae. Trademarks of Fannie Mae. SEL-2014-03 Page 3
Selling Guide Topics New or Updated Policies
B4-1.3-08, Comparable Sales ? Revised the policy by removing the requirement that an
explanation is required when using a comparable sale that is
older than six months.
- Provided an example to illustrate that in some instances it
may be appropriate to use older sales with proper time
adjustments rather than a dissimilar more recent sale. An
older sale may be more appropriate in situations when
market conditions have impacted the availability of recent
sales as long as the appraisal reflects the changing market
conditions.
