April 04, 2022

Bulletin 2022-030 Fannie Mae and Freddie Mac Desktop Appraisal

Fannie Mae and Freddie Mac Desktop Appraisal

Newrez LLC "Newrez" Approved Correspondent Clients: Newrez is pleased to announce the acceptance of Desktop Appraisals for conforming DU Approve and LPA Accept eligible loans.

 

Effective Date

 

  • Fannie Mae DU Version 11.0 submissions and resubmissions on or after 3/19/2022.
  • Freddie Mac LPA submissions and resubmissions on or after 3/6/2022.

 

Newrez is aligning with Fannie Mae SEL 2022-01 and Freddie Mac Bulletin 2022-2 on the use of the new Desktop Appraisal (Fannie Mae Form 1004 (Desktop)/Freddie Mac Form 70D) Uniform Residential Appraisal Report) when offered by DU/LPA, in lieu of an interior and exterior appraisal report.

 

A Desktop Appraisal is an alternative to traditional interior and exterior inspection appraisals. The appraiser relies on property tax records, multiple listing servicing information, past sales, prior appraisals, and other data to complete the appraisal report. Desktop Appraisal reports must be submitted to UCDP and the SSR for both Fannie Mae and Freddie Mac must be provided.

 

The use of the Desktop Appraisal is subject to meeting eligibility requirements, which include but are not limited to the following:

 

  • Purchase transactions only
  • Eligible Property Types
    • One-unit primary residence, including a property with an ADU
    • PUDs
  • Requires a DU Approve/Eligible or an LPA Accept recommendation with a message indicating the loan is eligible for delivery with a Desktop Appraisal
  • Maximum 90%
    • The LTV may exceed 90% based on the Desktop Appraisal value if the loan amount did not increase and all other eligibility requirements are met, including the requirement that the LTV ratio calculated, using the sales price, is less than or equal to 90%
    • LTV ratios greater than 90%, that occur as a result of loan amount changes, require an upgrade to an interior and exterior inspection appraisal (Form 1004/70) prior to closing
  • The appraisal report must be upgraded to Fannie Mae Form 1004/Freddie Mac Form 70, and include an interior and exterior inspection, when any of the following exist:
    • The appraiser has already physically inspected the subject property
    • The appraiser cannot obtain sufficient information about both the interior and exterior physical characteristics of the subject property from third-party data sources to develop an accurate and adequately supported appraisal
    • The appraiser cannot reconcile significant discrepancies (e.g., room count, gross living area, size, condition, etc.)
    • The subject property is undergoing renovation or rehabilitation
    • The data sources used to develop the appraisal, including the sales contract, reflect the presence of physical deficiencies or an adverse condition(s) indicating the property has a condition rating of C5 or C6 or a quality rating of Q6
  • A Desktop Appraisal cannot be used for a subsequent refinance transaction; they are only eligible for purchase transactions
    • Ineligible Transactions
    • 2-4 units
    • Community Seconds with a subsidized sales price
    • Condos
    • Construction-to-permanent (single-close and two-close)
    • DU/LPA casefiles with an Ineligible recommendation
    • HomeReady
    • Manufactured homes
    • Properties with resale restrictions
    • Refinance transactions
    • Second homes and investment properties

 

Resources

 

Fannie Mae

 

 

Freddie Mac