202.02

Appraisals

202.02A

Appraiser Selection

Requirements

You must:

  • maintain a list of AppraisersAppraisersPerson engaged to estimate a Property’s market value per USPAP. generally approved to perform AppraisalsAppraisalsWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. ;
  • document the selection and approval of an AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. , per your Lender Appraisal FunctionLender Appraisal FunctionThe Lender: internal roles or job functions, including any employees that report up to the Chief Underwriter (but excluding any Lender Loan Origination Functions), involved with the following Appraisal-related responsibilities: engaging the Appraiser; defining the Appraisal’s scope… processes, who is:
    • a Certified General Appraiser (or licensed or certified per state law, if that state does not use the Certified General Appraiser designation);
    • listed in good standing on the state roster per Title XI of FIRREAFIRREAFinancial Institutions Reform, Recovery, and Enforcement Act of 1989. ; and
    • actively prepares multifamily appraisals in the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). market;
  • if an in-house AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. is used, ensure your Lender Loan Origination FunctionLender Loan Origination FunctionAny: Lender internal roles or job functions reporting up to the Chief Production Officer; Lender employees who receive a commission or bonus if the Mortgage Loan closes, including any employees or functions that report up to these roles and/or their immediate supervisor; Mortgage Loan… is separated from and cannot in any way influence (i.e., an ethical wall) the in-house AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. to:
    • prevent conflicts of interest; and
    • maintain AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. independence;
  • require the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. to:
    • be in a narrative format, using only objective factors;
    • be signed by the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. ;
    • be certified by the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. to conform with current USPAPUSPAPUniform Standards of Professional Appraisal Practice requirements; and
    • comply with:
      • Instructions for Appraisers (Form 4827); and
      • any governmental regulations in effect when the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. was originated, including
        • FIRREAFIRREAFinancial Institutions Reform, Recovery, and Enforcement Act of 1989. , 
        • all fair lending laws, and
        • all fair housing laws;
  • provide the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. all applicable documents needed to accurately assess Property'sProperty'sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). value, including:
    • the most recent PCA ReportPCA ReportProperty Condition Assessment Report documenting the findings of a PCA. , or any other inspection reports (e.g., a structural engineering report);
    • a rent roll dated within 60 days of the Appraiser’sAppraiser’sPerson engaged to estimate a Property’s market value per USPAP. inspection date;
    • PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). operating statements detailing
      • income and expenses for the previous year (if available, for the previous 2 years), and
      • year-to-date income and expenses;
    • copies of:
      • the Borrower'sBorrower'sPerson who is the obligor per the Note. standard form of residential lease;
      • any executed commercial leases, including all amendments and attachments;
      • any ground leases;
      • any easements or regulatory agreements; and
      • any purchase/sales contracts executed within 3 years before the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. date;
    • any Environmental Site AssessmentsEnvironmental Site AssessmentsInvestigation and resulting report (Phase I ESA or Phase II ESA) conducted per Environmental Due Diligence Requirements (Form 4251), identifying if a Property has Recognized Environmental Conditions or Business Environmental Risks. ;
    • architectural plans, if the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is not yet completed;
    • site plans/surveys, if available;
    • for a Moderate Rehabilitation PropertyModerate Rehabilitation PropertyProperty that will undergo at least $8,000 per unit of Rehabilitation Work. , details of the
      • capital expenditures incurred, and
      • total construction costs; and
    • any information that may affect the Appraiser’sAppraiser’sPerson engaged to estimate a Property’s market value per USPAP. estimate of the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). value; and
  • not accept any AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. completed by an AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. selected, retained, or compensated by:
    • the BorrowerBorrowerPerson who is the obligor per the Note. ;
    • the SponsorSponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). ;
    • any Key PrincipalKey PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. ;
    • any GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. ;
    • for an AcquisitionAcquisitionAny Purchase of either the: Property’s fee simple or leasehold interest via a deed transfer; or Controlling Interest in the Borrower. , the seller or any related party; or
    • any third party, including Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement.
      • BrokersBrokersThird-party Person who arranges Mortgage Loan financing on the Borrower’s behalf, or Transfers/Assumptions on behalf of the new Borrower for an assumption, or transferee for a transfer. , or
      • Correspondents.

Guidance

If final reports are unavailable, you may send draft versions of the

  • PCA ReportPCA ReportProperty Condition Assessment Report documenting the findings of a PCA. , and
  • Environmental Site AssessmentsEnvironmental Site AssessmentsInvestigation and resulting report (Phase I ESA or Phase II ESA) conducted per Environmental Due Diligence Requirements (Form 4251), identifying if a Property has Recognized Environmental Conditions or Business Environmental Risks. .

If the final reports differ materially from the drafts sent to the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. , you must:

  • forward the final reports to the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. ; and
  • inquire whether the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. should be updated based on the final reports.
202.02B

Permissible Appraiser Communications

Requirements

When communicating with an AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. , you must comply with the Appraiser Communications table.

Appraiser Communications
You may... You must not... 
  • obtain supporting information for a specific market, including:
    • sales or rental comparable properties;
    • rent or expense data;
    • capitalization rate data;
    • recent sales; or
    • price per unit or square footage ranges;
  • provide all documents needed to accurately assess the Property's value per this Chapter;
  • share or request additional supporting comparable property information; and
  • request additional documents supporting the Appraiser’s conclusions.

provide any Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. data, such as

 

  • LTVLTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Pay Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage.  ,
  • DSCRDSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of:  principal, interest, and required Mezzanine Financing or Hard Pay Preferred Equity payments. ,
  • amount, or
  • Underwritten NCFUnderwritten NCFNet Cash Flow as adjusted by the Lender per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. .
202.02C

Appraiser Independence

Requirements

You must ensure no PersonPersonLegal person, including an individual, estate, trust, corporation, partnership, limited liability company, financial institution, joint venture, association, or other organization or entity (whether governmental or private). influences, or attempts to influence, the development, reporting, result, or review of an AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or any other manner including:

  • withholding, or threatening to withhold:
    • timely payment; or
    • future business;
  • demoting or terminating, or threatening to demote or terminate, the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. or any AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. employee;
  • promising, either expressly or implicitly, the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. or any PersonPersonLegal person, including an individual, estate, trust, corporation, partnership, limited liability company, financial institution, joint venture, association, or other organization or entity (whether governmental or private). related to the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. :
    • future business;
    • promotions; or
    • increased compensation, including
      • financial benefits, or
      • non-financial benefits;
  • conditioning the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. order, or any bonus payment on
    • the Appraisal’sAppraisal’sWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. opinion of the Property'sProperty'sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). value, or
    • a requested preliminary value estimate;
  • any AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. communications (other than providing a copy of the purchase/sales contract for an AcquisitionAcquisitionAny Purchase of either the: Property’s fee simple or leasehold interest via a deed transfer; or Controlling Interest in the Borrower. ) regarding the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). anticipated, estimated, encouraged, or desired:
    • comparable properties;
    • capitalization rates; or
    • value or value range;
  • providing the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. a proposed or targeted loan amount;
  • impairing, or attempting to impair, through any other act or practice, the Appraiser’sAppraiser’sPerson engaged to estimate a Property’s market value per USPAP.
    • independence,
    • objectivity, or
    • impartiality; or
  • violating compliance with any law or regulation, including the USPAPUSPAPUniform Standards of Professional Appraisal Practice .

To ensure the Appraiser’sAppraiser’sPerson engaged to estimate a Property’s market value per USPAP. independence, you must:

  • implement written policies and procedures;
  • ensure any Outside PartiesOutside PartiesPerson you retain to perform services for multifamily Mortgage Loans (e.g., Appraisers, inspectors, Correspondents, law firms, engineers, environmental consultants, and Brokers, title companies, or title agents). involved in your Lender Appraisal FunctionsLender Appraisal FunctionsThe Lender: internal roles or job functions, including any employees that report up to the Chief Underwriter (but excluding any Lender Loan Origination Functions), involved with the following Appraisal-related responsibilities: engaging the Appraiser; defining the Appraisal’s scope… maintain AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. independence by confirming they do not also participate in your Lender Loan Origination FunctionsLender Loan Origination FunctionsAny: Lender internal roles or job functions reporting up to the Chief Production Officer; Lender employees who receive a commission or bonus if the Mortgage Loan closes, including any employees or functions that report up to these roles and/or their immediate supervisor; Mortgage Loan…; and
  • if requested, provide evidence confirming your Lender Loan Origination FunctionsLender Loan Origination FunctionsAny: Lender internal roles or job functions reporting up to the Chief Production Officer; Lender employees who receive a commission or bonus if the Mortgage Loan closes, including any employees or functions that report up to these roles and/or their immediate supervisor; Mortgage Loan… are separate from your Lender Appraisal FunctionsLender Appraisal FunctionsThe Lender: internal roles or job functions, including any employees that report up to the Chief Underwriter (but excluding any Lender Loan Origination Functions), involved with the following Appraisal-related responsibilities: engaging the Appraiser; defining the Appraisal’s scope….

Guidance

Appraisal Independence
To ensure compliance, your written policies should include... That describe...
Procedures

how you maintain independence between the Lender Appraisal FunctionLender Appraisal FunctionThe Lender: internal roles or job functions, including any employees that report up to the Chief Underwriter (but excluding any Lender Loan Origination Functions), involved with the following Appraisal-related responsibilities: engaging the Appraiser; defining the Appraisal’s scope… and Lender Loan Origination FunctionsLender Loan Origination FunctionsAny: Lender internal roles or job functions reporting up to the Chief Production Officer; Lender employees who receive a commission or bonus if the Mortgage Loan closes, including any employees or functions that report up to these roles and/or their immediate supervisor; Mortgage Loan… through

 

  • organizational measures (e.g., an ethical wall),
  • staffing, and
  • written documentation.
Disciplinary Rules

the consequences for not complying with the requirements, including

 

  • promotion delays,
  • compensation reductions, or
  • termination, in very severe cases.
Training Programs

in-person or online training:

 

  • designed to aid compliance with the requirements; and
  • detailing policies outlining mandatory training
    • types,
    • content,
    • audiences, and
    • frequency.
202.02D

Valuation Date

Requirements

Valuation Date
If the Appraisal Date is more than... You must...
6 months before the Commitment Date Instruct the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. to update the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. per Instructions for Appraisers (Form 4827).
12 months before the Commitment Date Order a new AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. .

Guidance

You may be required to obtain a new or updated AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. if Fannie Mae determines the market deteriorated between the

  • Appraisal DateAppraisal DateEffective date of value in the Appraisal. , and
  • Commitment DateCommitment DateDate a Commitment is confirmed by Fannie Mae per Part IV, Chapter 2: Rate Lock and Committing, Section 204: Commitments. .
202.02E

Appraisals Ordered by Another Lender

Requirements

If you DeliverDeliverSubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. a Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. with an AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. prepared by an AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. selected by another lender, you must:

  • make all representations and warranties to Fannie Mae regarding the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. ; and
  • confirm it complies with this GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .
202.02F

Lender Appraisal Review

Requirements

Your Lender Appraisal FunctionsLender Appraisal FunctionsThe Lender: internal roles or job functions, including any employees that report up to the Chief Underwriter (but excluding any Lender Loan Origination Functions), involved with the following Appraisal-related responsibilities: engaging the Appraiser; defining the Appraisal’s scope… must:

  • review and approve each AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. for adequacy and compliance; and
  • ensure the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. includes:
    • an accurate description of the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). and the market, including:
      • the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). complete legal description;
      • any information you provided the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. ;
      • color photographs of the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code).
        • exterior,
        • interior common areas,
        • typical unit interiors,
        • surrounding area,
        • rental comparables,
        • sales comparables, and
        • commercial rental comparables;
      • maps showing the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). location relative to the location of the
        • land comparables,
        • current rental comparables,
        • future rental comparables, and
        • sales comparables;
      • qualifications of the
        • AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. , and
        • any supervising AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. ; and
      • a copy of your
        • complete signed engagement letter with the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. , and
        • communications with the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. regarding the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. scope;
    • an opinion of the Property'sProperty'sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). value per Part II, Chapter 2: Valuation and Income, Section 202.03A: Appraised Value, and supported by
      • market data,
      • logical analysis, and
      • sound professional judgment;
    • an opinion of the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). insurable value; and
    • an industry standard form of AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. appropriate for the Mortgage Loan’sMortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement.
      • size, and
      • structure.

Your Lender Appraisal FunctionsLender Appraisal FunctionsThe Lender: internal roles or job functions, including any employees that report up to the Chief Underwriter (but excluding any Lender Loan Origination Functions), involved with the following Appraisal-related responsibilities: engaging the Appraiser; defining the Appraisal’s scope… must:

  • return any report to the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. that:
    • is incomplete; or
    • lacks credibility; and
  • ensure your AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. review:
    • is documented in the Transaction Approval Memo;
    • is accompanied by all other AppraisalsAppraisalsWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. you ordered on the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). during the past 3 years; and
    • includes all information per the following Appraisal Analysis table.
Appraisal Analysis
For... You must...
Market Conditions

Confirm the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. accounts for current market conditions, including

 

  • supply and demand dynamics,
  • interest rates, and
  • economic factors.
Data Accuracy

Verify the Appraisal’sAppraisal’sWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. data accuracy, including

 

  • PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). details,
  • recent sales prices, and
  • relevant market data.
Property Inspections Determine if the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. conducted a thorough inspection of the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , including random sampling of occupied and vacant units per Instructions for Appraisers (Form 4827).
Sales/Rental Comparable Analysis
  • Determine if the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. used appropriate comparable properties similar in:
    • size and/or unit count (on both a per-unit and a per-square foot basis);
    • type (e.g., high-rise, mid-rise, garden, etc.);
    • age;
    • condition;
    • in-unit finishes;
    • amenities;
    • location, including
      • market,
      • submarket, and
      • distance to subject; and
    • sales of comparable properties, with at least 1
      • being a listing/pending sale, or
      • sold within 24 months of the Appraisal DateAppraisal DateEffective date of value in the Appraisal. .
  • If appropriate comparable properties were not used, either:
    • coordinate with the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. to obtain additional comparable properties; or
    • provide the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. additional comparable properties from AppraisalsAppraisalsWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information.
      • for any prior transactions you originated within the last 12 months before the Appraisal DateAppraisal DateEffective date of value in the Appraisal. , or
      • from any external data sources verifiable by the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. .
Market Rents and Expense Analysis If the Appraiser’sAppraiser’sPerson engaged to estimate a Property’s market value per USPAP. proforma income or expenses substantially differ from the Property'sProperty'sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). income and expenses used to calculate the Underwritten NCFUnderwritten NCFNet Cash Flow as adjusted by the Lender per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. , provide additional supporting comparable property data or rationale supporting your conclusions.
Capitalization Rate Analysis

Provide your assessment that the capitalization rate:

 

  • supports your final Underwriting ValueUnderwriting ValueValue of the Property determined by the Lender to size the Mortgage Loan per Part II, Chapter 2: Valuation and Income, Section 202: Appraisal and Valuation. ; and
  • is within comparable capitalization rates compared to
    • your portfolio data, or
    • any other external data sources you use to review appraisals.
Value Reconciliation
  • Review how the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. reconciled the values obtained from different approaches to determine the final opinion of value.
  • Document your assessment.

For each AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. , your Lender Appraisal FunctionsLender Appraisal FunctionsThe Lender: internal roles or job functions, including any employees that report up to the Chief Underwriter (but excluding any Lender Loan Origination Functions), involved with the following Appraisal-related responsibilities: engaging the Appraiser; defining the Appraisal’s scope… must ensure all:

202.02G

Subsequent Appraisals

Requirements

For any Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. , you must not order, obtain, use, or pay for a subsequent AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. unless:

  • you document in your Transaction Approval Memo that the initial AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. :
    • was not credible; or
    • violated legal and/or professional standards related to
      • USPAPUSPAPUniform Standards of Professional Appraisal Practice , or
      • nondiscrimination; and
  • the subsequent AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. :
    • is required per your pre-established written pre- or post-funding AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. review policy;
    • adheres to a policy of selecting the most reliable AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. rather than the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. with the highest value; or
    • is required by law.
202.02H

Appraiser Discontinuance or Misconduct

Requirements

You must promptly notify:

  • Fannie Mae if you discontinue using any AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. who completed AppraisalsAppraisalsWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. within the past 12 months for Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. you DeliveredDeliveredSubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. ; and
  • Fannie Mae and the applicable state AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. certifying and licensing agency, or other regulatory body, if you believe an AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. is:
    • violating USPAPUSPAPUniform Standards of Professional Appraisal Practice , fair lending, fair housing, or other applicable laws;
    • not complying with Instructions for Appraisers (Form 4827) in violation of its engagement with you; or
    • engaging in unethical conduct.