Reading appraisal reports after September 1, 2011

Appraisal Scoop

Reading appraisal reports after September 1, 2011 is going to look a bit different due to the Uniform Appraisal Dataset (UAD). Basically, both Fannie Mae & Freddie Mac have been working together to make changes to the way particular appraisal forms are filled out by appraisers throughout the country.

The UAD only applies to the following Fannie Mae forms: 1004, 2055, 1073 and 1075. These forms are the full appraisal (1004), exterior-only appraisal (2055), full condo appraisal (1073) and exterior condo appraisal (1075). The multi-unit forms are not affected by the UAD and keep in mind that FHA has not adopted the UAD as of yet either.

In my opinion most of the changes are fairly minor, but I’ve listed some of the bigger changes below that you’ll definitely want to know about:

1) Bathrooms: Instead of saying 2.5 bathrooms, which means 2 1/2 bathrooms, the appraiser will now say 2.1 bathrooms. The figure to the left of the decimal signifies full bathrooms and the number to the right signifies the amount of half bathrooms. For example, 2.2 bathrooms would equal two full baths and two half baths, and 4.5 bathrooms would indicate four full bathrooms and 5 half bathrooms.

2) Condition Rating: Instead of using “average”, “fair” or “good”, appraisers will now use a specific rating system of C1-C6. The definitions for condition are now standardized, so the appraiser will basically choose whatever definition fits best for a given house, with C1 being best and C6 being worst.

3) Quality Rating: Instead of appraisers saying things like “good quality”, “average” or “good upgrades” for Quality of Construction, they’ll now use a standardized definition and rate the property with a Q1-Q6.

4) Architectural Design: Appraisers can no longer simply say “Single Story” or “2-Story” for design, but rather must be specific and say things like Colonial, Highwater Bungalow, Contemporary, Victorian, Farmhouse, Ranch, Cottage, etc…

5) View: Appraisers will provide at least one specific view for the subject property and then rate the view as either “N” (neutral), “B” (beneficial) or “A” (adverse).

6) Miscellaneous Changes: There are just over 60 fields affected in the appraisal forms due to the UAD (out of 200-ish fields). Mostly everything is minor and has to do with the way data is formatted, but some of the items mentioned above are definitely big changes for the appraisal industry. See Fannie Mae’s UAD information or UAD Help (an appraisal school).

What do you think of the changes? Good? Bad? Do you have any questions?

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~ by mortgagecompliancecorner on August 22, 2011.

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