202.02F

Lender Appraisal Review

Requirements

Your Lender Appraisal Functions Lender 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 Appraisal AppraisalWritten 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 Appraisal AppraisalWritten 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 Property PropertyMultifamily 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’s Property’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 Appraiser AppraiserPerson engaged to estimate a Property’s market value per USPAP. ;
      • color photographs of the Property’s Property’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’s Property’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
        • Appraiser AppraiserPerson engaged to estimate a Property’s market value per USPAP. , and
        • any supervising Appraiser AppraiserPerson engaged to estimate a Property’s market value per USPAP. ; and
      • a copy of your
        • complete signed engagement letter with the Appraiser AppraiserPerson engaged to estimate a Property’s market value per USPAP. , and
        • communications with the Appraiser AppraiserPerson engaged to estimate a Property’s market value per USPAP. regarding the Appraisal AppraisalWritten 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's Property'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’s Property’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 Appraisal AppraisalWritten 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’s Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2
      • size, and
      • structure.

Your Lender Appraisal Functions Lender 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 Appraiser AppraiserPerson engaged to estimate a Property’s market value per USPAP. that:
    • is incomplete; or
    • lacks credibility; and
  • ensure your Appraisal AppraisalWritten 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 Appraisals AppraisalsWritten 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 Property PropertyMultifamily 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;
    • includes a statement describing how the PCA PCAAssessment of the Property's physical condition and historical operation. conclusions impacted your determination of the Underwriting Value Underwriting 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
    • uses supporting data from
      • your multifamily mortgage loan portfolio,
      • verified third-party valuations,
      • DUS Insights, or
      • other industry standard sources; and
  • includes all information per the following Appraisal Analysis table.
Appraisal Analysis
For... You must...
Market Conditions

Confirm the Appraisal AppraisalWritten 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’s Appraisal’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

 

  • Property PropertyMultifamily 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 Appraiser AppraiserPerson engaged to estimate a Property’s market value per USPAP. conducted a thorough inspection of the Property PropertyMultifamily 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 Appraiser AppraiserPerson 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 Date Appraisal DateEffective date of value in the Appraisal. .
  • If appropriate comparable properties were not used, either:
    • coordinate with the Appraiser AppraiserPerson engaged to estimate a Property’s market value per USPAP. to obtain additional comparable properties; or
    • provide the Appraiser AppraiserPerson engaged to estimate a Property’s market value per USPAP. additional comparable properties from Appraisals AppraisalsWritten 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 Date Appraisal DateEffective date of value in the Appraisal. , or
      • from any industry standard sources verifiable by the Appraiser AppraiserPerson engaged to estimate a Property’s market value per USPAP. .
Market Rents and Expense Analysis If the Appraiser’s Appraiser’sPerson engaged to estimate a Property’s market value per USPAP. proforma income or expenses substantially differ from the Property's Property'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 NCF NCFAt underwriting or for any specified period, the amount calculated 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 Value Underwriting 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 industry standard sources you use to review appraisals.
Value Reconciliation
  • Review how the Appraiser AppraiserPerson 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 Appraisal AppraisalWritten 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 Functions Lender 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: