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Appraisal Modernization

The Modern Valuation Spectrum

Fannie Mae is on a journey of continuous improvement to make the home valuation process more efficient and accurate. We are transitioning to a spectrum of options to establish a property’s market value, with the option matching the risk of the collateral and the loan transaction. The spectrum balances traditional appraisals with appraisal alternatives.

Value Acceptance + Property Data

This new option reduces cycle times and may reduce borrower costs, promotes safety and soundness by obtaining a current observation of the subject property, and provides operational simplicity and certainty at time of loan application.

How is Value Acceptance (Appraisal Waiver) Defined?

An optional offer to sell the loan without an appraisal for certain loan case files underwritten in Desktop Underwriter® (DU®). It is based on data and modeling framework that confirms the validity of the value/sale price. Formerly known as a property inspection waiver or property fieldwork waiver.

 

Glossary of Terms

Value acceptance (appraisal waiver) Uses data and a modeling framework to confirm the validity of the value/sale price. For purchases and refinances, especially well-suited for low-risk refinances when the subject and market data is abundant.
Value acceptance + property data Value acceptance + property data extends value acceptance (appraisal waiver) benefits to more borrowers while identifying current subject property characteristics including condition.
Hybrid appraisal Property data collected by a trained and vetted third party (real estate agent, insurance inspector, appraiser, etc.) is passed to an appraiser to perform an enhanced version of a desktop appraisal.
Desktop appraisal Appraiser completes the appraisal without physically inspecting the property, using data from various sources (agents, homeowners, MLS, tax records, etc.). Best suited for purchase transactions.
Traditional appraisal (full appraisal) Appraiser collects the property data and completes the market analysis required for the appraisal. For complex property types or situation where data is sparse.


What Lenders Can Expect

  • Lenders can expect to see a reduction in value acceptance (appraisal waiver) offers.
  • The percentage of loans receiving value acceptance or value acceptance + property data offers will exceed the original value acceptance percentage for most lenders.
  • Desktop Underwriter (DU) will begin to issue new messages for value acceptance + property data beginning April 15, 2023.

Exercising the Options

Value Acceptance
Data, model, and technology driven		 Value Determination                                                    
Appraisal driven

Exercising value acceptance + property data

A lender may only exercise value acceptance + property data when:

  • the final submission of the loan case file to DU resulted in an eligibility message for value acceptance + property data

  • property data collection is obtained after the initial DU offer

  • property data collection is submitted to the Property Data API

  • an appraisal is not obtained for the transaction

  • the offer is not more than four months old on the date of the note and mortgage.

If the value acceptance + property data offer is lost due to changes in qualifying loan characteristics after the property data was obtained, in some cases it may be possible for the lender to the submit the property data to an appraiser to perform a hybrid appraisal assignment. See Selling Guide B4-1.2-03, Hybrid Appraisals for specific requirements. Alternatively, the lender may obtain a desktop or traditional appraisal report as specified by DU.

Exercising 1004 Hybrid appraisal option

A hybrid appraisal is permitted only when all of these preconditions are met in this sequence:

  • DU determines the loan is eligible for value acceptance + property data,

  • lender obtains property data and submits it to our API,

  • PDC confirms that the property type is single-family

  • residential (excludes manufactured homes, condominiums, co-ops, 2+ units, and nonresidential), and finally,

  • the loan loses eligibility in DU for value acceptance + property data due to a change in qualifying loan characteristics.

The lender must provide the property data collection to an appraiser to perform a hybrid appraisal assignment.

Desktop Underwriter messages will not indicate when a case file is eligible for a 1004 Hybrid appraisal.

Resources:

  1. Value Modernization
  2. Value Acceptance + Property Data Fact Sheet
  3. Lender Checklist
  4. Loan Delivery Job Aid Delivering a Loan Without an Appraisal

 

Loan Delivery Sort ID Loan Delivery Field Name in Loan Delivery

Value Acceptance

 

 Value Determination Appraisal Driven
Value Acceptance (Appraisal Waiver) Value Acceptance + Property Data
(non-High LTV Refinance) (High LTV Refinance) Hybrid Desktop Traditional
82 Appraisal Document File ID Not Required, leave blank Not Required, leave blank Not Required, leave blank Enter UCDP Doc File ID Enter UCDP Doc File ID Enter UCDP Doc File ID
83 Appraisal Amount
  1. For a purchase transaction, enter the sales price
  2. For a refinance transaction, enter the estimated value
 Enter the estimated value
  1. For a purchase transaction, enter the sales price
  2. For a refinance transaction, enter the estimated value
 Enter the value on the original appraisal Enter the value on the original appraisal Enter the value on the original appraisal
84 Appraisal Effective Date Not Required, leave blank Not Required, leave blank Not Required, leave blank Enter the date on the original appraisal Enter the date on the original appraisal Enter the date on the original appraisal
85 Property Valuation Form Not Required, leave blank Not Required, leave blank Not Required, leave blank

Enter appropriate appraisal type: 

  1. FNM 1004

Enter appropriate appraisal type:

  1. FNM 1004

Enter appropriate appraisal type:

  1. FNM 1004
  2. FNM 1004C
  3. FNM 1025
  4. FNM 1073
  5. FNM 2090
89 Appraisal Method Enter "None" Enter "None" Enter "None" Enter "Desktop Appraisal" Enter "Desktop Appraisal" Enter "Desktop Appraisal"
368 Investor Feature Code Enter "801" Enter "807" has been auto populated Enter "774" n/a n/a n/a
376 Investor Collateral Program Identifier Enter "Property Inspection Waiver" Enter "Property Inspection Waiver" Enter "Property Inspection Waiver" n/a n/a n/a
525 Appraiser's State License Number Not Required, leave blank Not Required, leave blank Not Required, leave blank Enter the appraiser's state license or cert no. Enter the appraiser's state license or cert no. Enter the appraiser's state license or cert no.
534 Supervisory Appraiser's State License Number       Enter the supervisory appraiser's state license or cert no. IF a supervisor signed the appraisal Enter the supervisory appraiser's state license or cert no. IF a supervisor signed the appraisal Enter the supervisory appraiser's state license or cert no. IF a supervisor signed the appraisal