Appraising During COVID-19

Overhead view of an appraiser's desktop.
Appraising during Covid-19 means making adjustments!


Fannie Mae’s Announcement

Who could have predicted what the first part of 2020 would hold!? These are unexpected times that have taken us all by surprise! Everyone, including appraisers, has made adjustments to their daily life. The appraisal process has become part of those adjustments, although the changes will be temporary.

We realize that as an appraiser you may be worried about the amount and type of information that you need for a credible report. You may be worried about conforming to Fannie Mae’s temporary adjustments and want to ensure that you are protected.

Here at DataMaster, we want to assure you that we are here to help! We have the information to guide you as you complete your appraisals correctly and defensibly!

This post breaks down the temporary appraisal requirements, outlines the 1004MC requirements, and gives you several resources to go to for authoritative, accurate information.

Let’s get started!

Fannie Mae’s Lender Letter

Temporary Rules For Appraising During COVID-19 Outbreak

In response to the arrival, spread, and impact of COVID-19 in the United States, Fannie Mae has released a Lender Letter addressing “temporary flexibilities” to their appraisal requirements. Effective immediately and expiring on May 17, 2020, this letter outlines instructions on a variety of requirements including:

  • Temporary appraisal requirement flexibilities
  • Desktop appraisals
  • Exterior-only inspection appraisals
  • Revisions to the scope of work, statements of assumptions and limited conditions, and appraiser’s certifications
  • Additional form instructions for appraisals
  • Identification of a Fannie Mae loan
  • Appraisal waivers
  • Delivery requirements
  • Completion reports (Form 1004D)
  • HomeStyle Renovation and HomeStyle Energy requirements

Let’s take a closer, brief look at each bullet point.

Temporary Appraisal Requirement Flexibilities

Alternatives to the traditional appraisal will be accepted until May 17, 2020. Should COVID-19 concerns preclude the execution of an internal inspection, desktop appraisals or an exterior-only inspection appraisal will be allowed in lieu of traditional appraisals.

Desktop Appraisals

In preference to exterior-only appraisals, desktop appraisals are recommend as the prefered choice by Fannie Mae. A desktop appraisal relies on public records, MLS information, and other third-party data sources to identify the property characteristics. The appraisal will be scored by Collateral Underwriter (CU). Here’s a short intro video by Fannie Mae.

Exterior-only Inspection Appraisals

For specific transactions, i.e., purchase money loans and limited cash-out refinances where the loan being refinanced is owned by Fannie Mae, exterior-only inspection appraisals will allowed.

For a list of the forms which are allowed for each property type, please see the detailed instructions here.

Exterior-only inspections require particular exhibits to the appraisal reports, including:

  • a street map of the subject property and comparable sales
  • original photographs of the front of the property
  • any other information that supports the opinion of market value

Revisions to the Scope of Work, Statements of Assumptions and Limited Conditions, and Appraiser’s Certifications

Fannie Mae and Freddie Mac have modified the language of documents included in the statement of assumptions and limiting conditions, scope of work, and certifications.

Follow this link for detailed instructions on the modified instructions for scope of work, statement of assumptions and limiting conditions and certification for desktop appraisals.

Follow this link for detailed instructions on the modified instructions for scope of work, statement of assumptions and limiting conditions and certification for appraisals with exterior-only inspection.

Additional Form Instructions For Appraisals

Exterior-only or desktop appraisals completed on interior and exterior inspection forms, must include the corresponding text identifier that reports the type of appraisal completed (“desktop” or “exterior”) in the “Map Reference” field.

Identification of a Fannie Mae Loan

As mentioned above, for a loan to qualify for these temporary measures, the loan owner must already owe on a loan being serviced by Fannie Mae. To determine whether a loan is a Fannie Mae loan, lenders can find the information in their records or use the Loan Lookup tool.

Appraisal Waivers

Should an appraiser request an appraisal waiver due to concerns over potential exposure to COVID-19, lenders are encouraged by Fannie Mae to accept such requests. Before ordering appraisals, lenders must submit the case to DU (desktop underwriter) to discover the waiver offering.

Delivery Requirements

No changes are being implemented

Completion Reports (Form 1004D)

Due to issues related to COVID-19, if a completion certificate is not available for a loan, with the exception of HomeStyle Renovation and HomeStyle Energy loans, confirmation in a signed letter by the borrower will be sufficient proof of completion. Lenders are required to produce other evidence of completion as well, including paid invoices, occupancy permits, and so forth.

HomeStyle Renovation and HomeStyle Energy Requirements

HomeStyle Renovation or HomeStyle Energy loans are not eligible for the temporary appraisal modifications. If a traditional appraisal with interior and exterior inspections, as well as a 1004D where required, are not possible, then the loan does not qualify for sale to Fannie Mae.

For updates on reporting during this COVID-19 pandemic, check in on Fannie Mae’s update page here!

Completing The 1004MC Correctly

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You’ve Got This!

If you are looking for instructions on 1004MC forms, or perhaps in need of a brush-up, look no further! We’re sharing a document created by ServiceLink, a Black Knight company. This excellent forty-page document explains in detail what a neighborhood is, how to calculate the absorption ratio, and what needs to be filled out in the 1004MC form.

For a thorough description of how to correctly complete the 1004MC, go to this link. We’re proud to be the only existing software company that ServiceLink refers customers to in this document with the instructions:

Appraisers use a variety of software tools to aid them in compiling the data and performing the calculations necessary to complete the 1004MC form. The most common are: Third party solutions such as SMART (now defunct) and DataMaster, 1004MC “wizards” built into a local MLS service, and Spreadsheets.

Any questions? Give us a call!

Appraisal Institute Guide Note 12: Analyzing Marketing Trends

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All of the Help You Need is Here With DataMaster!

Do you have questions about how DataMaster populates the Market Analysis? Go to our website for a detailed explanation.

Another excellent resource is the Appraisal Institute Guide Note 12: Analyzing Marketing Trends. This document emphasizes that the appraiser ultimately determines the scope of work. The document also details factors that cause the change in market then defines the Market Analysis.

Again, if you have any questions, give us a call!



DataMaster is the gold standard of the data management software for appraiser industry. Turn to our support, online videos, and online documentation for directions on properly completing your files during this unprecedented time!

Looking for somewhere to take a break? We’re on Facebook, Twitter, and LinkedIn! We post regularly in an effort to teach, connect, and entertain!

Happy appraising!

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