Fannie Mae Announcement

Fannie Mae released some updates to Section B4 of its Selling Guide that change your everyday appraisal process.  You will want to read SEL-2010-09 in detail.

Here is a brief summary:


1.  Interior photos are now required when doing an interior inspection (effective 9/1/2010)


2.  Calculating the Months of Housing Supply on the 1004MC has been clarified.  You now use the Total # of Active Listings as of the last day for the given 3 month time frame. (Not the total cumulative number of properties listed during the entire three month time frame.)  They prefer this method in order to  provide a more precise depiction of housing supply on the effective date of the report.  (effective 9/1/2010)


3.  Use of foreclosed or short sale homes as comparables require the appraiser to analyze the motivations of the parties involved as well as the the physical condition of the comparable to determine whether there is an adjustment needed.  In many neighborhoods, bank related sales sell for a discount compared to owner-occupied sales and may need an upwards adjustment.  Here in the Minneapolis area bank related sales often sell for 20% to 30% less than traditional sales.


4.  Fannie Mae provides a reminder that seller concessions as well as the inclusion of personal property continue to be a source of over-valuation and need to be addressed by the appraiser.