FAQs: Property Valuation

Q1. Does AIR specifically prohibit communication with an appraiser by a real estate agent? 

No. Real estate agents and other third parties can be valuable sources of information. Conversations in which real estate agents or other third parties on behalf of the lender attempt to influence the development, reporting, result, or review of an appraisal are prohibited. 

Q2. Does AIR apply to servicing activities, e.g., loss mitigation, MI removal, pre-foreclosure transactions, etc.? 

No. AIR is specific to a “mortgage origination transaction,” and servicing or portfolio management activities are not “mortgage origination transactions.” However, the basic principles should be applied to protect the process and mitigate risk. 

Q3. How do the GSEs audit compliance with AIR? 

Compliance with AIR is part of each GSE’s operational review of the lender. By selling the loan to a GSE, the lender represents and warrants compliance with that respective GSE’s selling requirements, including compliance with AIR.

Q4. When selecting an appraiser, may lenders use a pre-approved appraiser list or panel? 

Yes. Lenders may use a pre-approved list or panel to select a residential appraiser, provided that: 

(1) Any employees of the lender tasked with selecting appraisers for the list are independent of the loan production staff; and 

(2) The loan production staff is not involved in selecting an appraiser off the list for a particular appraisal assignment. See AIR section IV.D. 

Q5. How does AIR section I.B.(9) impact how lenders may remove appraisers from a list of qualified appraisers? 

AIR section I.B.(9) addresses the removal of an appraiser from a list of qualified appraisers in connection with influencing or attempting to influence the outcome of an appraisal. See also sections IV.A.(2), IV.D., and VIII. 

Q6. Some lenders have proprietary automated origination systems that include a process for ordering appraisals. How does AIR impact those systems?

 The lender must review its systems to ensure that the appraiser selection process complies with AIR. 

Q7. Who should be considered the “restricted parties” for purposes of achieving appraiser independence? 

The term “restricted parties” refers to the loan production staff who are responsible for generating loan volume or approving loans, as well as their subordinates. This would include an employee whose compensation is based on loan volume or the closing of a loan transaction. Employees responsible for the credit administration function or credit risk management are not considered loan production staff. See AIR section IV.A.(1). 

Q8. Can a restricted party participate in the onboarding, selection, or offboarding of an Independent Party? 

No. Restricted parties cannot participate at any level. These actions have to be completed by parties that are independent of loan production. See section IV.A.(2). 

Q9. Are employees of the lender, such as processors, closers, or underwriters, that do not receive commissions or incentives for the closing of a loan permitted to order appraisals? 

Yes, if their immediate supervisor is not a member of the mortgage production staff or otherwise participates in the lender’s mortgage production process and is not considered a restricted party. See AIR sections IV. and VIII. 

Q10. May a representative of the lender provide an appraisal management company a list or a panel of appraisers to use for loans involving a specified mortgage broker, real estate agent, or loan officer? 

No. No one is allowed to provide a list or a panel of appraisers to use for loans involving a specified mortgage broker, real estate agent, or loan officer. See AIR sections I.B.(9) and IV.A.

Q11. Are lenders and correspondent lenders permitted to use in-house appraisers to obtain appraisals? 

Yes. In-house appraisers may be used in accordance with AIR, section V.

Q12. Is a lender required to use an AMC for ordering appraisals? 

No. A lender may order appraisals directly from an individual appraiser, appraisal company, or an AMC. 

Q13. May a lender order an appraisal by directing a mortgage broker to select an AMC from among a group of specifically authorized AMCs, one of which would receive information from the mortgage broker about the loan application and begin the appraisal process? 

No. A mortgage broker may not have any involvement in selecting a protected party. See section IV.A.(2). 

Q14. If a lender has an approved group of AMCs, is it acceptable for a mortgage broker to independently select from that group if it’s done on an established timetable or eligibility window, and not on an individual loan basis? For example, every 120 days, the mortgage broker has the opportunity to switch to a different approved AMC. 

No. A mortgage broker may not have any involvement in selecting a protected party. See section IV.A.(2). 

Q15. May a lender direct a mortgage broker to use a web portal set up either by the lender, or by the lender’s authorized agent, through which the mortgage broker inputs a request for an appraisal that triggers the lender’s system to order an appraisal? 

Yes. A lender may direct a mortgage broker to use a web portal in this manner so long as the web portal does not allow the mortgage broker to have control of picking the AMC as noted in AIR sections I.B.(10) and IV.A.

Q16. What is the difference between requesting an appraisal and ordering an appraisal? 

Requesting an appraisal is providing the information necessary for the placement of an appraisal order, e.g., property type, address, and contact information to access the property. Ordering an appraisal involves the selection and engagement of the Independent Party that will manage the appraisal process and/or perform the appraisal, which is not allowed. 

Q17. Under what circumstances may a Restricted Party request an appraisal order using applicable systems (e.g., loan origination systems, third party portals)? 

A Restricted Party may request an appraisal order using applicable systems as long as the Restricted Party does not have control or input over the selection of the Independent Party. Providing required information (e.g., property type, address, and contact information for access to the property) to facilitate the placement of an appraisal order is acceptable. Refer to Q16 for differences in requesting an appraisal versus ordering an appraisal. 

Q18. May mortgage brokers select a specific AMC if the lender works with more than one AMC? 

No. If the lender works with more than one AMC, the lender must select the AMC. The mortgage broker cannot select from a list of approved AMCs. See section IV.A.(2). 

Q19. May a lender accept an appraisal that was ordered by a mortgage broker? 

No. AIR does not allow a lender to accept an appraisal that was ordered by a mortgage broker, loan officer, or real estate agent as noted in AIR section IV.A.(2). 

Q20. May a lender accept a mortgage broker’s recommended list of independent parties? 

No. The lender may not use a list provided by a mortgage broker or any other restricted party. See sections I.B.9 and IV.A.(2). 

Q21. May a mortgage broker order an appraisal directly from an AMC that was specifically authorized by the lender? 

No. AIR prohibits mortgage brokers from ordering appraisal services. See section IV.A.(2). 

Q22. Does AIR permit a mortgage broker to select an appraiser from the lender’s list of approved appraisers if the lender is responsible for the relationship with the appraiser, including compensation? 

No. AIR prohibits lenders from relying on an appraisal if the mortgage broker had a role in selecting, retaining, or compensating the appraiser. See section IV.A.(2).

Q23. Can a lender use an appraisal that was obtained by another lender in connection with a loan that was originated and submitted by a mortgage broker when the mortgage broker was not involved in the ordering of, or managing the process for, the appraisal? 

Yes. A lender may accept an appraisal transfer from a different lender in accordance with the requirements of AIR sections VI. and VIII., all Fannie Mae Selling Guide requirements, and related documents. 

Q24. Lender A (an approved GSE Seller/Servicer) originates and closes a loan in its name but sells it to lender B (also an approved GSE Seller/Servicer), which in turn sells that loan to that GSE. Is lender B under any obligation to obtain a new appraisal? 

No. Lender B may buy a closed loan from Lender A and sell the loan to the GSE without a new appraisal if Lender B can represent and warrant that any appraisal conducted in connection with the loan conforms to AIR sections VI. and VIII., all Fannie Mae Selling Guide requirements, and related documents.

Q25. If the appraisal is ordered by the lender in a manner compliant with AIR, are there any specific requirements about payments to the appraiser? 

Yes. The lender or any third party specifically authorized by the lender shall be responsible for providing for payment of all compensation to the appraiser. See AIR section IV.B. 

Q26. Are borrowers precluded from providing payment for an appraisal to an AMC? 

No. AIR does not prohibit a borrower from providing payment to an AMC acting as an agent of the Seller; however, the borrower may not pay the appraiser directly for an appraisal.

Q27. How is “closing” of the loan defined? Is closing the date the documents are executed or the date the funds are disbursed? 

We define “closing” as the date the borrower executes the loan documents.

Q28. Does AIR prohibit members of a lender’s staff, or the staff of an authorized third party, from communicating with an appraiser for corrections of factual errors in the appraisal report? 

No. Communications with an appraiser regarding corrections of factual errors may be made by anyone on the staff of the lender, or on the staff of an authorized third party. See AIR, section IV.A. 

Q29. Who on the lender's staff, or on the staff of an authorized third party, may have communications with an appraiser relating to or having an impact on valuation, including ordering, or managing an appraisal assignment? 

Anyone who is not part of loan production staff or who is not compensated on a commission basis upon successful completion of a loan or anyone who does not report, ultimately, to any officer of the lender not independent of the loan production staff or process, may have communications with an appraiser relating to or having an impact on valuation, including ordering or managing an appraisal assignment. See AIR, section IV.A.(2).(c).

Q30. Is a loan eligible for sale to the GSEs if the lender purchased the loan from a correspondent that did not comply with AIR in originating that loan?

No. It is the lender’s responsibility to ensure that loans it purchases with intent to deliver to the GSEs comply with AIR and all Fannie Mae Selling Guide requirements. 

Q31. Do sellers need to adopt policies to address potential misconduct such as bribery or intimidation of appraisers? 

Yes. A seller must have in place policies and procedures to ensure compliance with AIR. See AIR section VIII. 

Q32. Is a seller required to establish a process for addressing complaints regarding AIR compliance? 

Section VIII of AIR requires sellers to adopt written policies, procedures, and disciplinary rules and implement adequate training programs to ensure compliance with AIR. As a best practice, lenders should include in their policies, procedures, and disciplinary rules a process for addressing AIR compliance complaints.

Q1. How do lenders get access to value acceptance? 

Value acceptance is available to all lenders who use DU, including through the Desktop Originator® (DO®) interface. No registration is needed. 

Q2. What is the difference between value acceptance and value acceptance + property data? 

Value acceptance + property data is value acceptance with the additional required step of obtaining a property data collection. See Selling Guide B4-1.4-11, Value Acceptance + Property Data for details. 

Q3. Is value acceptance available to correspondent lenders? 

Yes. A correspondent lender may receive a value acceptance offer when submitting a loan casefile to DU. Correspondent lenders should contact their aggregators to discuss aggregator interest in delivering loans with value acceptance to Fannie Mae and to ensure the correspondent is obtaining the required collateral due diligence to meet aggregator guidelines. 

Q4. Other than the requirements specified in the Selling Guide, are there any other considerations for offering value acceptance on a DU loan casefile? 

Yes. There are a few requirements not related to the loan product or terms that will prevent DU from offering value acceptance, including: 

• The subject property address must include the street address, unit number (if applicable), city, state, and ZIP code.
• If a Doc File ID is provided (which indicates an appraisal was already obtained), value acceptance will not be offered. 

Q5. Are there prior appraisal requirements for value acceptance to be considered? 

For value acceptance to be considered, generally a prior appraisal must be found for the subject property in Fannie Mae’s CU data. When required, DU will compare the address for the subject property to the property addresses found in CU. When a property address match is found, DU will use the information from the prior appraisal to determine if the loan casefile is eligible for value acceptance. In some cases, the prior appraisal may not be acceptable. For example, if a CU Overvaluation Flag was issued on the prior appraisal or the appraisal could not be scored, that prior appraisal will not be used, and value acceptance will not be offered on the new loan casefile. 

Q6. Are rental or investor properties eligible for value acceptance offers? 

DU may offer value acceptance on loans secured by rental or investor properties when the rental income is not used to qualify borrowers for the loan. If rental income is used to qualify, the Single-Family Comparable Rent Schedule (Form 1007) is required. Because this form can only be completed in conjunction with an appraisal, DU will not offer value acceptance in those cases. 

When rental income is not used to qualify, the lender can provide the alternative income documentation to document the rental income for lender reporting purposes (see Selling Guide B3-3.1-08, Rental Income). These alternatives do not require an appraisal, so value acceptance may be offered and accepted. 

Q7. Are value acceptance offers made on loan casefiles underwritten through Preliminary Findings? 

Yes. When the value acceptance offer was enhanced in December 2016, DO users would only see the offer on loan casefiles underwritten using a sponsoring lender. Effective with DU Version 10.1, DO loan casefiles underwritten through Preliminary Findings are eligible for the value acceptance offer. 

Q8. Is there any lender-level reporting available for value acceptance loan casefiles? 

Lenders can obtain Day 1 Certainty® Pre-Delivery and Post-Delivery reports (DU Validation, Value Acceptance & Appraised Value Certainty Post-Delivery and DU Validation, Value Acceptance & Appraised Value Certainty Pre-Delivery) in Fannie Mae Connect™. The reports provide a lender-level and responsible-party dashboard of Day 1 Certainty activity. The Pre-Delivery report provides loan-level detail on eligible refi loan casefiles that have received an offer to waive the appraisal. The Post-Delivery report provides loan-level detail for loans on which the lender received and exercised a value acceptance offer. The reports can be found in the Management section of the Report Center in Fannie Mae Connect.

Q9. How does a lender know if value acceptance is offered on a loan casefile? 

As part of the risk analysis, DU assesses the reasonableness of the lender-submitted value for the property and recommends the minimum level of collateral due diligence that must be performed for the loan to be delivered to Fannie Mae. 

Loan casefiles that are eligible for value acceptance will receive a message in the DU Underwriting Findings report indicating a value acceptance offer. 

NOTE: For loan casefiles that are not eligible for value acceptance, the fieldwork recommendation message will require an appraisal with an interior and exterior property inspection. 

Q10. What is the process for exercising a value acceptance offer? 

To exercise a value acceptance offer on a loan casefile that is eligible for value acceptance, the lender must deliver the loan to Fannie Mae with SFC 801 along with the applicable casefile ID reported on the Loan Schedule or Schedule of Mortgages. Additionally, the value acceptance offer may not be more than four months old on the date of the note and the mortgage. 

Q11. If a lender receives a value acceptance offer on a loan casefile, are there situations in which the lender would still need to obtain an appraisal? 

Yes. There may be certain situations in which a lender needs to obtain an appraisal, even though value acceptance was offered on the loan casefile. 

Examples of when an appraisal would need to be obtained include the following: 

• The loan is a Texas Section 50(a)(6) mortgage. (DU cannot identify Texas Section 50(a)(6) mortgages so it may issue an invalid value acceptance offer).
• The lender has reason to believe that fieldwork is warranted because the sales contract for a purchase transaction stipulates repairs that are not minor, or that may affect the safety, soundness, or structural integrity of the property. See Q12.
• The lender is required by law to obtain an appraisal.
• The property is a leasehold property.
• The property is in a community land trust or has certain other resale restrictions.
• The mortgage insurance provider requires an appraisal. When an appraisal is obtained, the value acceptance offer may not be exercised, and the loan cannot be delivered with SFC 801. 

NOTE: The borrower always has the choice to request an appraisal. 

Q12. If a lender receives a value acceptance offer on a purchase transaction but the sales contract stipulates repairs to be made, can the offer be exercised?

If the repair item(s) are minor in nature and there is no impact to the safety, soundness, or structural integrity of the property, the lender may exercise the value acceptance offer. 

When there are incomplete items or conditions that are not minor or may affect the safety, soundness, or structural integrity of the property, it must be appraised subject to the completion of those repairs or alterations. As such, the lender may not exercise the value acceptance offer. 

Q13. Can a lender execute a value acceptance offer on casefiles in process at the time a disaster occurs? 

Desktop Underwriter is regularly updated with ZIP codes impacted by a major disaster as declared by the Federal Emergency Management Administration (FEMA). Fannie Mae may also add areas impacted by other disasters or emergencies at its discretion. New casefiles for properties located in these areas will not receive value acceptance offers through DU, unless an appraisal was completed after the disaster occurred or Fannie Mae has other evidence that property risk has been mitigated. 

However, existing casefiles will still be eligible to execute a value acceptance offer. The lender may exercise the value acceptance offer but must take prudent and reasonable actions to determine the condition of the property and be able to make the representations and warranties described in the Selling Guide B2-3-05, Properties Affected by a Disaster, before delivering the loan to Fannie Mae. 

The following message will display in the DU Findings, in addition to the value acceptance offer message, on casefiles where a recent disaster has occurred: 

The subject property is located in an area that may have been impacted by a recent disaster. The lender must take prudent and reasonable actions to determine if the condition of the property has been materially impacted by the disaster and the lender must comply with the Selling Guide property eligibility requirements that pertain to properties affected by a disaster. If value acceptance was offered, the lender may exercise this offer if the described conditions are met. 

Q14. What should the lender do if a disaster is declared after the loan closes with value acceptance but before the loan has been delivered to Fannie Mae? 

The lender makes property-related representations and warranties as of the time it delivers the loan to Fannie Mae. Before delivery of a mortgage loan to Fannie Mae when the property may have been damaged by a disaster, the lender is expected to take prudent and reasonable actions to determine whether the condition of the property may have materially changed. The lender is responsible for determining if an inspection of the property and/or new appraisal is necessary to support its representations. See Selling Guide B2-3-05, Properties Affected by a Disaster for full guidance on properties affected by a disaster. 

Q15. What qualifies as “taking prudent and reasonable actions” when a lender needs to determine if a property has been damaged by a disaster? Is an inspection required? 

Fannie Mae is not prescriptive as to what method the lender must use to determine the condition of the property. The lender must do whatever it deems necessary to be confident in warranting the condition of the property, and this will vary by circumstance. 

Q16. How do rural high-needs value acceptance offers work? 

As part of our FHFA Duty to Serve objectives, we are offering value acceptance in designated rural high-needs areas. The rural high-needs value acceptance offer is for low- to moderate-income borrowers purchasing homes in targeted rural areas and is contingent on obtaining a home inspection. The value acceptance logic functions in the same way as standard value acceptance with the following exceptions: 

• It allows for higher LTV ratios up to 97% and CLTV ratios up to 105% with a Community Seconds®.
• Only for purchase transactions of less than $200,000.
• It is restricted to one-unit principal residence properties (excluding manufactured homes) located in a designated rural high-needs area, as defined by the FHFA High Needs Counties Map.
• Borrower income must be at or below 100% of the area median income.
• Borrowers must sign an affidavit that they have been given a copy of the property inspection, read the report, and have been notified of any lender required repairs. 

The lender will receive a specific DU message for eligible loans and can exercise the rural high-needs value acceptance with SFC 801. The lender must obtain and review a home inspection report and represent and warrant that the property is safe, sound, and structurally secure, and that the property is not in C6 condition. Properties in C6 condition are not eligible unless repairs are made prior to delivery. The home inspection will also reduce the risk of the high-needs borrower encountering unanticipated repair costs. 

Q17. What are the requirements for home inspectors, and can a borrower provide the home inspection? 

In states that regulate inspectors, we require professional inspectors who meet the state license and education requirements. In states that do not have inspector licenses, we require inspectors to be professionally accredited members in good standing of a nationally recognized property inspection organization. 

The borrower can provide the home inspection; however, the inspector must meet the above requirements, and the home inspection must be sufficient for lenders to determine property condition and represent and warrant that the home is not in C6 condition. 

Q18. If a mortgage insurance (MI) provider requires that the lender obtain an appraisal based on an interior and exterior property inspection, but the loan casefile was eligible for value acceptance, could the lender exercise the value acceptance offer and receive the limited waiver of property-related representations and warranties? 

No. For loans with MI coverage, if the MI provider requires an appraisal for the transaction, the lender must comply with the MI provider’s requirements. When a lender obtains an appraisal and also receives a value acceptance offer, the offer may not be exercised, and the loan cannot be delivered with SFC 801 (as stated in Q11 and Q19). 

Q19. If a lender obtains an appraisal and also receives a value acceptance offer from DU, may the lender exercise the offer? 

No. When a lender obtains an appraisal and also receives a value acceptance offer, the offer may not be exercised, and the loan cannot be delivered with SFC 801. 

NOTE: As stated in Q4, DU will not offer value acceptance when an appraisal has been uploaded to UCDP within the prior 120 days from any lender. 

Q20. If the lender exercises the value acceptance offer on a refinance loan and does not obtain an appraisal, is the lender still required to confirm that the subject property is not listed for sale? 

Yes. Selling Guide B2-1.3-02, Limited Cash-Out Refinance Transactions and B2-1.3-03, Cash-Out Refinance Transactions still apply when the lender exercises the value acceptance offer. 

Q21. If a lender receives a value acceptance offer on a loan casefile submission and, on a subsequent submission of the loan casefile, loses the value acceptance offer, can the lender still exercise the offer? 

No. A lender may exercise the value acceptance offer only when a value acceptance offer exists on the final submission to DU. If a lender attempts to exercise a value acceptance offer for a loan that does not have a value acceptance offer on the latest DU submission, the lender will receive the following error message in Loan Delivery: 

The loan was entered with a value acceptance SFC but a value acceptance was not offered on the latest submission to DU. 

NOTE: Resubmission of the loan data will not affect value acceptance recommendation unless the estimate of the loan amount, property value, property type, loan type, address, or LTV inputs are changed with the original casefile. A new casefile is considered a new loan application, and the value acceptance logic is run independently for each casefile, which may result in different outcomes than those of other casefiles for the same property. 

Q22. When a value acceptance offer is exercised, is the lender responsible for the standard representations and warranties regarding the value of the property? 

Fannie Mae accepts the value submitted by the lender when a value acceptance offer is exercised. The lender is relieved from Fannie Mae’s enforcement of representations and warranties related to property value and marketability, physical property characteristics, and property eligibility including condition. The lender is required to represent and warrant that the data submitted (other than the value) to DU is complete and accurate. 

When exercising a value acceptance offer, the lender is required to include the casefile ID and SFC 801 in the loan delivery file to Fannie Mae to receive the applicable representation and warranty relief. 

Q23. For properties secured by condos that receive a value acceptance offer, do lenders get any relief from project review requirements? 

No. All project standards still apply. Lenders are responsible for determining the documentation they need to review to determine that the project meets the requirements for the project review being completed. 

Additionally, relying exclusively on the appraisal for any review type is not recommended because not all project eligibility requirements are addressed in the appraisal. 

Q24. When a value acceptance offer has been exercised, what are the lender’s QC obligations? 

Lenders should use the QC process to evaluate potential issues with their execution of value acceptance offers. Choosing to include loans that have value acceptance in a discretionary sample can help to ensure that the process of exercising a value acceptance offer follows lender and Fannie Mae requirements. For example, the review should validate the accuracy of all DU inputs for the loan. Also, it should confirm that the lender declined to exercise value acceptance offers on Texas Section 50(a)(6) mortgages or certain loans with resale restrictions, and instead obtained an appraisal as required by our policy.

Q25. What if the SFC and/or the casefile ID are not properly included in the delivery file? 

Without this information, it is unclear whether the lender truly intended to deliver a loan with value acceptance. Therefore, if this information is not present, Fannie Mae will not be able to provide value acceptance. Lenders will receive a fatal edit and will not be able to submit loans without value acceptance SFC. If the SFC and casefile ID are not included at delivery, lenders subsequently will need to submit a reconciliation request to ensure appropriate identification and coding of transactions eligible for property-related representation and warranty relief. 

Q26. When a lender exercises a value acceptance offer, must they provide the property-specific housing goals data (e.g., number of bedrooms, eligible rents)? 

For single-family principal residences and second homes, the property-specific housing goals fields are only required if the Property Valuation Method Type is “Full Appraisal” or “Prior Appraisal Used.” When a value acceptance offer is exercised, the Property Valuation Method Type is “None.” See Instructions for Delivering a Loan Without an Appraisal for requirements if an appraisal is not provided or obtained for primary residences and second homes. 

Gross monthly rents must be reported to Fannie Mae in the loan delivery data for all investment properties, regardless of whether the borrower is using rental income to qualify for the mortgage loan. See Selling Guide A3-4-02, Data Quality and Integrity, for alternate methods of reporting gross monthly rents on these properties.

Reach out to your account team, or: 

• Call 1-800-2FANNIE (1-800-232-6643), option 1 (technology support).
• See Selling Guide B4-1.4-10, Value Acceptance and B4-1.4-11, Value Acceptance + Property Data .
• Visit the Property Valuation web page.

Q1. Why did the term “value acceptance” replace “appraisal waivers”? 

Value acceptance better reflects the actual process which uses data and technology to accept the lender provided value. The term “appraisal waiver” was retired on Sept. 3, 2025 and we will now only use the term “value acceptance”. 

Q2. What is the difference in loan eligibility criteria between value acceptance and value acceptance + property data? 

Value acceptance + property data is offered when the loan application in DU® meets all requirements for value acceptance except that Fannie Mae needs a current view of the property to ensure satisfactory condition and eligibility for delivery. 

NOTE: Investment properties when rental income is used to qualify the borrower are not eligible for value acceptance + property data.

Q3. Can lenders place orders for property data collection with qualified property data collectors not listed on the Property Data Collection: Fulfillment Providers list? 

Yes. Exercising a value acceptance + property data offer requires the submission of a property data collection to the Property Data API prior to the note date. A lender may utilize any qualified property data collector that can deliver property data to the API as an integrator or using one of the API integration service providers on the Property Data Collection: Fulfillment Providers list.

Q4. How would property data collectors respond if the homeowner or point of contact requests a copy of the property data collection (pictures, floor plan, data, etc.)? 

Property data collectors must refer these requests to the lender. 

Q5. Does Fannie Mae have minimum standards for data collectors? 

Yes, lenders must verify and be able to demonstrate data collectors are: 

• Selected in accordance with Fannie Mae requirements, including the Property Data Collector Independence Requirements;
• Vetted through an annual background check;
• Professionally trained; and
• In possession of the essential knowledge to competently complete the property data collection. 

See the Property Data Collector section of Selling Guide B4-1.4-11, Value Acceptance + Property Data for more information. 

Q6. Can background checks for licensed appraisers and real estate agents be used for a data collector? 

Each state has different requirements, and the lender will need to confirm the background checks are conducted annually and sufficient to vet the data collector. 

Q7. Must a data collector be licensed? 

A license is not required unless mandated by state or federal statute. 

Q8. Does Fannie Mae provide data collector training? 

Fannie Mae does not administer data collector training; training is typically administered by each service provider. Please see Selling Guide B4-1.4-11, Value Acceptance + Property Data for lender requirements.

Q9. Is there a standardized dataset for property data collections? 

Yes. Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs), have crafted an aligned data standard — the Uniform Property Dataset (UPD) — that will allow for fungibility of property data between the GSEs. Visit the UPD page for more information. 

Q10. Must the lender retain the property data obtained in the loan file? 

Yes. The lender is required to retain any documentation on which the loan is based. See Selling Guide A2-4.1-01, Establishing Loan Files for details.

Q11. Can a loan lose a value acceptance + property data offer? 

Yes. The offer may be lost if there is a change in qualifying loan characteristics or if an appraisal is obtained prior to closing the loan. 

Q12. Can an offer that is lost be restored? 

Yes, the offer can be restored if the resubmission to DU meets the value acceptance + property data requirements. The lender must not exercise the offer if an appraisal has been obtained for the transaction. 

Q13. For value acceptance + property data, does DU identify whether a loan is a Texas Section 50(a)(6) loan? 

No. The lender is responsible for identifying whether a loan is a Texas Section 50(a)(6) loan and must not exercise a value acceptance + property data offer on a Texas Section 50(a)(6) loan. 

Q14. How should the lender address a repair item(s) involving safety, soundness, or structural integrity or significant items of incomplete construction or renovation noted in a property data collection? 

To verify completion of repairs, incomplete construction, or renovation, the lender must use the borrower attestation letter. See Form 1004D and Completion Alternatives in Selling Guide B4-1.2-05, Requirements for Verifying Completion and Postponed Improvements. 

Q15. How should a lender address minor conditions or deferred maintenance noted in the property data collection? 

If the lender determines from the property data collection there is the existence of minor conditions or deferred maintenance that does not affect safety, soundness, or structural integrity, there is no significant incomplete construction/renovation, and it is an eligible property type, the loan can be processed and submitted without any further action. 

Q16. Can lenders use the 1004D process to confirm repairs? 

No, the 1004D is used in connection with appraisals only. 

Q17. Can lenders use the Freddie Mac Property Data Report (PDR) Completion Form? 

No, Fannie Mae Selling Guide outlines the requirements for documenting that repairs have been completed. See Form 1004D and Completion Alternatives in Selling Guide B4-1.2-05, Requirements for Verifying Completion and Postponed Improvements. 

Q18. Must the property data collection be obtained prior to the note date? 

Yes. The lender must order, review, and successfully submit the property data collection to the Property Data API prior to closing a loan. 

Q19. What is the Property Data API Review Tool, and how does a lender gain access? 

Fannie Mae created the Property Data API Review Tool (PDART) to enable users to view the data and images submitted to our Property Data API. Users can assess the accuracy and completeness of the property data collection and identify potential property eligibility issues for underwriting, quality control, and vendor management purposes. Visit the PDART page for information on gaining access.

Property data collection with needed repairs or completion verification 

The lender must represent and warrant that the property: 

• Does not have safety, soundness, or structural integrity issues;
• Does not have significant items of incomplete construction or renovation; and
• Meets Fannie Mae’s property eligibility requirements (see Selling Guide B2-3-01, General Property Eligibility). 

To make these representations and warranties in the absence of an appraisal, the lender must examine the descriptive information and photo exhibits from the property data collection to determine whether the property meets all of the Selling Guide requirements. Any repair, alteration, or completion required for the property to meet the Selling Guide eligibility requirements must be completed prior to sale of the loan to Fannie Mae. Because there is no appraisal, the lender cannot use appraisal Form 1004D for verification of completion. Instead, the lender will need to obtain a borrower attestation letter.

The letter must include (at a minimum) the following: 

• Borrower name;
• Property address;
• Certification language that the alteration or repair was satisfactorily completed;
• Date and signature(s) of the borrower(s);
• Visually verifiable exhibits of the completed work; and
• One or more of the following:
  • Signature of the qualified professional;
  • A professionally prepared report; or
  • paid invoices for the alterations or repairs. 

NOTE: Two forms of verification are required — the visual exhibit together with at least one of the three items listed at the end above. 

If virtual inspection technology is used to generate the visually verifiable exhibit, it must be unaltered and able to be authenticated using metadata and the geocode for the subject property. 

When the lender, based on their review of the property data, is uncertain about the need for repairs, alterations, or completion, the lender may need to obtain a professional inspection targeting the feature in question (example: obtaining a roof inspection when roof appears worn but unable to ascertain whether any defect, damage or deficiency exists from photos). The lender’s review of a professionally prepared inspection report may lead to a repair requirement or may resolve the issue.

Q1. What Fannie Mae form will appraisers use to complete a desktop appraisal? 

Appraisers must use Fannie Mae Form 1004 (Desktop) to complete desktop appraisals. Note that this is different from our temporary response to COVID-19, which required appraisers to report desktop appraisals on the standard URAR by inserting a modified set of instructions, scope of work, statement of assumptions and limiting conditions, and certifications into the comment addendum. 

Q2. What are the differences between the traditional Form 1004 and Form 1004 (Desktop)? 

See the “URAR Hybrid and Desktop Appraisal Forms – Overview” for a line-by-line comparison of the differences between Forms 1004 and 1004 (Desktop). 

Q3. How should the appraiser complete the four Appraisal Assignment Type fields in the Additional Comments section of Form 1004 (Desktop)? 

Appraisers must provide the Appraisal Assignment Type and supporting details as shown in the following table. 

Note: When the assignment type is “DesktopAppraisal,” the Subject Property Data Collection Method must indicate “Other,” the Subject Property Data Collection Date field must be blank, and the Subject Property Data Workforce field must be blank. This will result in the report xml displaying: AppraisalReportContentName=”DesktopAppraisal;Other;;” . 

Q4. Does Certification 10 allow an appraiser to accept information about the transaction from someone with a financial interest (e.g., homeowner, real estate agent)? 

Yes, provided the appraiser verifies the information through a disinterested source. 

NOTE: Verification should not be confused with re-creation. Appraisers have broad discretion in how they verify and what sources they consult. Examples of verification sources include websites with aerial or street-level photos, floor plans or imagery generated by third-party applications (commonly known as 3D scans), remote viewing through virtual inspection technologies, assessor data, or prior appraisal assignment results. 

Q5. What is the difference between a floor plan and footprint sketch? 

See the definitions of floor plan and footprint sketch in the Selling Guide E-3-06, Acronyms and Glossary of Defined Terms: F. 

Q6. How can a floor plan be created digitally? 

Appraisers typically generate digital sketch exhibits for their appraisal reports using sketching tools integrated in their appraisal forms software. That is an acceptable solution for floor plans, as well. The key is that the floor plan cannot be hand drawn. That said, we are not prescriptive about what solutions an appraiser may leverage. For example, third-party applications are available that can create floor plans using mobile device apps, 3D scans, video chats, or virtual inspections. 

Q7. If an interested party to the transaction provides the appraiser with a floor plan generated using 3D scan technology, does it have to be verified?

 Regardless of who provides the 3D scan application output to the appraiser, the content itself is generally controlled by the software providers, who are not interested parties to the transaction. So, the appraiser’s obligation under Certification 10 to verify information from interested parties would not apply. However, the appraiser should analyze them in the context of the body of information available in the normal course of business, the same as with any other data. 

Q8. Can appraisers use a previously available floor plan? 

Yes, if it is accurate and representative of the current state of the property, and meets the requirements in the Exhibits for Appraisals section of Selling Guide B4-1.2-01, Appraisal Report Forms and Exhibits. 

Q9. Is additional verification required when photos are obtained from an interested party? 

Photos taken during a live walk-through of the subject are considered an appraiser observation during a live event and do not require further verification. Photos obtained without direct observation from the appraiser may require verification. 

Q10. Is a full floor plan with interior partitions required for outbuildings, such as toolsheds, offices, and garages? 

No. A full floor plan is not required for outbuildings (except in the case of an outbuilding containing an accessory dwelling unit). A separate software-generated footprint sketch that includes exterior wall dimensions must be provided. 

Q11. Do floor plans with interior walls need to be generated in accordance with the ANSI® standard for the desktop reports? 

Although Fannie Mae does not require desktop appraisal floor plans to be compliant with the ANSI standard, we encourage the appraiser to voluntarily adopt ANSI when possible. Some 3D scan companies have publicly committed to generate ANSI-compliant output; when considering a 3D scan floor plan, appraisers may wish to consult the website of the source company for more information. 

Q12. Can the appraiser perform a personal onsite interior and exterior inspection of the subject property for a desktop appraisal? 

No. If the appraiser assigned the desktop physically visits the property and does an interior inspection, it has crossed over to a traditional appraisal and is no longer a desktop. In that case, the appraiser must report on the standard Form 1004. See Certification Two in the Form 1004 (Desktop). 

Q13. Are the age of appraisal requirements for desktop appraisals different from other appraisals? 

Yes. When the effective date of the original desktop appraisal report is more than four months from the date of the note and mortgage, a new appraisal is required. 

Q14. Will these be supported in Collateral Underwriter® (CU®)? 

Yes, desktop appraisals will receive CU risk scores and messages. If the CU risk score is 2.5 or less, the lender will receive enforcement relief of certain representations and warranties, the same as for traditional appraisals (see Selling Guide A2-2-06, Representations and Warranties on Property Value). 

Q15. Can lenders lose a desktop appraisal offer, like can sometimes happen with value acceptance, based on the risk of the loan? 

Yes, but the desktop appraisal eligibility parameters are relatively straightforward. If the loan meets the eligibility requirements (single-family, one-unit, primary residence, purchase, LTV ≤ 90%, DU Approve/Eligible status — see DU Desktop Requirements), DU® will offer the desktop appraisal option. If the terms of the loan change so that the eligibility requirements are no longer met, with one exception DU will withdraw the desktop appraisal offer. The exception is when the LTV increases above 90% solely because the desktop appraisal is below the contract price — in that scenario, DU will continue to offer the desktop appraisal option. 

Q16. Can desktop appraisals be used for new construction purchases? 

Yes. If the construction is not complete as of the effective date of the desktop appraisal, then verification of completion applies, including inspection of the property and completion of form 1004D by the appraiser upon completion of the construction. The appraiser will be required to verify that the work was completed in accordance with the requirements and conditions in the original appraisal report. See Selling Guide B4-1.2-05, Requirements for Verifying Completion and Postponed Improvements for more details. 

Q17. Can desktop appraisals be used for a subsequent transaction? 

No. A desktop is only for purchase transactions and cannot be used for a subsequent refinance transaction. Also, when there is a subsequent sale of the subject, a new appraisal assignment is required. 

Q18. Can desktop appraisals be used for Texas 50(a)6 loans? 

No. Texas 50(a)6 loans are, by definition, refinance transactions; only purchase transactions are eligible to use the desktop appraisal option.