Fannie Mae issued an announcement last month that addressed changes in its appraisal-related policies.

“Due to current conditions in the real estate market, it is paramount that appraisers are provided with sufficient guidance to properly appraise and document the appraisal report,” the announcement began. “Fannie Mae recognizes the Uniform Standards of Professional Appraisal Practice as the minimum appraisal standards for the appraisal profession. In addition, Fannie Mae has established its own requirements to supplement the Uniform Standards.”

Beginning April 1, Fannie Mae will require the new Form 1004MC for all appraisals involving mortgage loans involving properties of one-to-four units. This form is posted on efanniemae.com.

“The Form 1004MC is intended to provide the lender with a clear and accurate understanding of the market trends and conditions prevalent in the subject neighborhood,” the announcement continued. “The form provides the appraiser with a structured format to report the data and to more easily identify current market trends and conditions.”

The announcement also detailed Fannie Mae’s new policy on the use of supervisory appraisers.

“If a supervisory appraiser signs the appraisal report as the appraiser, the supervisory appraiser must have performed the inspection of the subject property,” the report read.

Other notable passages in the announcement include:

• “If the appraiser utilizes comparable sales outside of the subjects neighborhood when closer comparable sales appear to be available, the appraiser [will be required to] provide an explanation as to why he or she used the specific comparable sales in the appraisal report.”
   

• “When there are incomplete items or conditions that affect the livability, soundness or structural integrity, the property must be appraised subject to completion of the specific alterations or repairs. In such cases, the lender must obtain a certificate of completion from the appraiser before it delivers the mortgage to Fannie Mae.”
   

• “The appraiser [is required to] research and comment on whether the subject property is currently for sale or if it has been listed for sale within 12 months prior to the effective date of the appraisal.”
   

• “When adjustments are made to the appraisal for the effective age, the appraiser must provide an explanation for the adjustments and the condition of the property.”
   

• “When appraising new construction, it is acceptable for the appraiser to verify the transaction of the comparable sale by viewing a copy of the HUD-1 Settlement Statement from the builder’s file.”