FHFA issues new appraisal standards, effective Sept. 1

The Uniform Appraisal Dataset (UAD) was created to improve the quality and consistency of appraisals on mortgages for Fannie Mae and Freddie Mac, according to FHFA. Recently announced by the Federal Housing Finance Agency (FHFA) and take effect September 1.

For Realtors®, Bradley said it’s important to know that appraisals will now be required to have standardized verbiage. “We’re no longer allowed to use words like ‘fair’ or ‘good’ to rate a property. Appraisers will be required to use condition (C1-C6) and quality (Q1-Q6) ratings based on the provided definitions,” she explained.

“More than ever before, appraisers must have well documented reports that prove the value of the home. No longer are appraisers the ‘final word’ on the value. Lenders routinely use computer generated valuations to compare against the appraisal. If the computer’s value differs from the appraiser’s value, the processing of the loan is halted and additional documentation is requested from the appraiser,” Bradley said.

Will this be one more way to complicate real estate world? Do you think that this will help buyer and sellers? In my experience, local professionals know the value and to their due diligence provides better data than any computer has proven to me to know that one side of Baltimore Pike is more desirable in this area but a mile down the other side is preferred by location. Let me know what you think.