With the temporary appraisal flexibilities, originally announced in Single-Family Seller/Servicer Guide (Guide) Bulletin 2020-5, recently extended through December 31, 2020, we want to remind you that a loan is only eligible for sale to Freddie Mac if the appraiser has sufficient information, including about interior condition, to complete a credible desktop or exterior-only inspection appraisal. It isn’t acceptable for the appraiser to make assumptions about the property’s condition or characteristics.

Ensuring a Credible Appraisal Report

Taking a few steps can help you make sure Freddie Mac’s requirements have been met and a credible appraisal report has been provided.

  • Verify the appraisal report has adequate information about the subject property interior and exterior characteristics.
  • Make sure the appraiser used and properly referenced a data source. Examples include, but are not limited to, Multiple Listing Service (MLS), real estate agent, homeowner, public records and other online tools such as satellite imagery and street views.

 

  • If the appraiser has not identified the data source, request an update to the appraisal.
  • If the appraiser cannot identify the condition, quality, or other property characteristics in order to provide a credible appraisal report, an interior and exterior inspection appraisal is required.

When we implemented the temporary appraisal flexibilities, revised documents were provided (e.g., scope of work, statements of assumptions and limiting conditions, and appraiser’s certifications) to use with both the desktop and exterior-only inspection appraisal. Specifically, certification #10 was removed, allowing appraisers to rely on information from an interested party to the transaction (borrower, real estate agent, property contact, etc.), and certification #2 was updated to note that third-party data sources are required in order to provide a reliable appraisal with respect to property condition and characteristics.

While these revised documents were provided, they didn’t change the existing requirement – the appraiser must have adequate information about the property’s physical characteristics to develop a credible appraisal report.