Desktop Appraisal FAQ

What is a desktop appraisal?

Desktop appraisals (Form 70D) are an alternative to traditional interior and exterior inspection appraisals (Form 70). The appraiser relies on property tax records, multiple listing service information, past sales, prior appraisals, and other data to complete the appraisal report.
Which Freddie Mac form will appraisers use when completing a desktop appraisal?

Appraisers must use Freddie Mac Form 70D when reporting a desktop appraisal. Upon completion, the desktop appraisal must be submitted to the Uniform Collateral Data Portal^® (UCDP^®).
Can the appraiser or a trainee of the appraiser make a personal inspection of the subject property to obtain photos and a floor plan and still complete the appraisal as a desktop assignment?

Freddie Mac defines a desktop appraisal as an appraisal assignment for which the scope of work does not include field work by the appraiser. If the appraisal’s scope of work includes a personal inspection of the subject property by the appraiser, the appraisal assignment no longer meets the definition of a desktop appraisal.
The desktop appraisal (Form 70D) requires the appraiser to include a floor plan. Is the floor plan different than a building sketch?

Yes, a floor plan is different than a building sketch. A building sketch is an exterior perimeter drawing of the dwelling, reflecting the outline of the property. A floor plan is an interior detail of the dwelling’s layout. By including interior walls, the floor plan shows the relationship between rooms and reflects interior flow. Windows, doors, bath fixtures, appliances, and the like do not need to be included on the floor plan, unless their location affects the appeal, marketability, or value of the property.
If the appraiser receives a floor plan from a third-party, can it also be used to fulfill the requirement to provide a building sketch?

Yes, provided it includes exterior dimensions that the appraiser can use to verify the finished and unfinished areas of the subject property.
Can the appraiser use photos or a floor plan obtained by a third-party inspection of the subject property for a desktop appraisal?

Yes. A desktop appraisal is an appraisal assignment for which the scope of work does not include field work by the appraiser. So, the appraiser may use information obtained in this manner.

This differs from how a hybrid appraisal is performed. A hybrid appraisal is an appraisal assignment for which the scope of work includes reviewing a recent report containing interior/exterior standardized property data in lieu of the appraiser performing a personal inspection.
Can the sketch and floor plan be a single exhibit?

Yes. The sketch and floor plan can be a single exhibit. There must be exterior dimensions, interior partitions, and the dimensions for calculating finished and unfinished areas must be reported.
Can the appraiser get interior photos and a floor plan via a virtual walkthrough of the subject property?

Yes. Photos and floor plans that are obtained from a virtual walkthrough of the subject property with an appraiser and owner, listing agent, or others can be used by the appraiser. Acceptable and available technological applications include, but are not limited to, FaceTime, Skype, and CubiCasa.
Is verification of authenticity required for photos or a floor plan obtained via an appraiser’s virtual walkthrough of the subject property?

No, additional verification of authenticity is not required when information is obtained in this manner.
Does the desktop appraisal report need to include specific photos or a minimum number of photos?

Yes. At a minimum, the desktop appraisal report must include photographs of the front, rear, and street scene in addition to the kitchen, all bathrooms, and the main living area of the subject property.
Are additional photos required when the subject property has a significant feature such as an accessory dwelling unit (ADU) or pool?

The appraiser must have sufficient information about the physical characteristics of the subject property to complete the desktop appraisal. This includes when there are significant features like an ADU or pool. If additional photos or other documentation, like a floor plan with dimensions for an ADU, are needed to adequately detail the feature, then these must be made available to the appraiser and be included in the appraisal report.
What is the effective date for a desktop appraisal?

The effective date of a desktop appraisal is the date that the appraiser completes their analysis, opinions, and conclusions.
Does Freddie Mac have specific qualifications for appraisers who complete desktop appraisal assignments?

No. Freddie Mac requires the appraiser to be licensed or certified in the state in which the subject property is located. The appraiser must have the knowledge and experience appraising the property type in the market area and have access to applicable data sources. It is up to the appraiser to determine, prior to agreeing to accept an assignment, that they can perform the assignment competently. When the appraiser signs the appraisal report they attest, as evidenced by Certification #11, that they have the knowledge and experience in appraising the type of property in the market area.
If a Seller obtains a desktop appraisal for a purchase transaction loan with a 90% loan-to-value (LTV) ratio based on the sales price, but the appraised value from the desktop appraisal is below the sales prices, is the desktop appraisal still acceptable?

Yes. If the desktop appraisal results in an appraised value less than the sales price causing the LTV ratio to be greater than 90%, the Seller is permitted to deliver the loan with the desktop appraisal and is not required to upgrade to an interior and exterior inspection appraisal (Form 70) based on the higher LTV ratio. However, if the LTV ratio increases for any other reason (e.g., a loan amount increase) and is greater than 90%, the Seller must upgrade to an interior and exterior inspection appraisal (Form 70).
Since the appraiser did not complete a personal inspection of the subject property it may be more difficult to obtain information about it. Can an appraiser rely on information obtained from technology platforms?

Consistent with Uniform Standards of Professional Appraisal Practice (USPAP), appraisers are permitted to consider and develop any information deemed credible. The appraiser may obtain information from sources that include, but are not limited to, private third-party websites, remote mapping and floor plan technologies, or public record providers.
Appraiser’s Certification #10 was removed as part of COVID-19 appraisal flexibilities, but it is included in Form 70D. What is different?

For the COVID-19 appraisal flexibilities, Appraiser’s Certification #10 was removed to recognize the mitigating circumstances associated with the pandemic and acknowledge that the appraiser might only be able to rely on information from an interested party to the transaction (for example, the homeowner) and independent verification might not be possible. Because Form 70D includes Certification #10, the appraiser must verify, from a disinterested source, all information in the report that was provided by parties who have a financial interest in the sale or financing of the subject property.
May an appraiser make assumptions regarding the characteristics of the property such as condition, quality, room count, amenities, finished basement, etc. without a data source?

It is unacceptable for the appraiser to assume the condition of the property is “average” or “similar to the exterior of the home”. If adequate and verifiable information about the subject property is not available from credible sources, then the desktop appraisal is not acceptable. Appraisers must have data and verification sources they consider reliable. There will be instances where it is not appropriate for the appraiser to perform the desktop appraisal and the lender must obtain an interior and exterior inspection appraisal (Form 70).
When completing a desktop appraisal, should the appraiser use the finished/unfinished areas reported by public records if the building sketch provided by a third-party reflects significantly different results?

When analyzing comparable sales data, it is not uncommon for varying sources to report different data for features, including the finished and unfinished area. The same will likely be true when analyzing subject property data for a desktop appraisal assignment. In all cases, the appraiser must analyze and reconcile the data and decide which data is most reliable. If credible subject property data is not available, then the assignment must be upgraded to an interior and exterior inspection appraisal (Form 70).
Can an appraiser complete a desktop appraisal if they are aware of the existence of minor repairs, deficiencies, or deferred maintenance?

Yes. Freddie Mac allows an appraisal to be completed “as is” for an existing property when there are minor repairs or deficiencies, or deferred maintenance. The appraiser must make appropriate and supported adjustments for these conditions in the appraisal report, when necessary. However, it is up to the appraiser to determine whether additional information, that may include the appraiser’s personal inspection of the subject property, is necessary to assess the impact of the conditions.
Can a desktop appraisal be used for a new construction purchase transaction?
Yes. A desktop appraisal may be completed for a new construction property. However, the transaction and property must comply with all desktop appraisal requirements, including that the mortgage must:
- be a purchase transaction mortgage;
- be secured by a 1-unit primary residence
- have an LTV ratio of 90% or less, based on the contract sale price.
Additionally, the desktop appraisal must include a:
- floor plan,
- building sketch, with dimensions,
- subject photos, to include, front, rear and street views, kitchen, bathrooms, and main living areas,
- comparable photos, and a
- location map.
If construction is not complete as of the effective date of the desktop appraisal, the appraiser must verify completion prior to the Settlement Date by inspecting the property and completing Form 442. An acceptable alternative to the appraiser provided Form 442 is the Warranty of Completion, Form 400, completed by the borrower and the builder, to evidence completion of the improvements.
Can a desktop appraisal be completed “subject to” repair, inspection, or completion?

Yes, provided the appraiser has sufficient information to identify what conditions require repair, inspection, or completion.

Except for required inspections, the appraiser will need to verify that the required repairs or incomplete items have been satisfactorily addressed. This will require a personal inspection of the subject property and completion of Form 442. The appraiser, or an unlicensed or licensed trainee must perform the inspection and the appraiser must sign as a supervisory appraiser on Form 442.
Statement of Assumptions and Limiting Conditions #2 requires the appraiser to include a floor plan that shows the approximate dimensions of the improvements. Where would an appraiser obtain this information?

The appraiser may have this information in their files. Many appraisers collect builder floor plans in the market areas where they work. Prior appraisals, listing packages or public records may also be sources for floor plans. Appraisers may also obtain a floor plan produced by available scanning applications or other technology that may require the participation of parties such as real estate professionals or homeowners
Can an appraiser complete a desktop appraisal in a market area where they have not provided prior appraisal services?

Certification #11 on Form 70D states that the appraiser has knowledge and experience in appraising the specified property type in the specified market. If the appraiser has not performed prior appraisal services in the area in which the subject property is located, the appraiser may not complete the assignment. This requirement applies to all appraisals performed on loans sold to Freddie Mac.
Can a desktop appraisal report be reused for a subsequent refinance of the subject property?

No. Unlike other appraisal reports, a desktop appraisal can only be used for a purchase transaction.
Are the age of appraisal and appraisal update requirements for a desktop appraisal the same as for other appraisals?

No. Unlike other appraisal reports, a desktop appraisal may not have an effective date that is more than 120 days prior to the Note Date. If the Note Date is more than 120 days after the effective date of the desktop appraisal, a new desktop appraisal (Form 70D) is required. An appraisal update (Form 442) is not sufficient.

There are four fields at the top of the Additional Comments Section of Form 70D. What are the purposes of and requirements for these fields?

These fields should not be confused with the Assignment Type fields on Page 1 of the appraisal report. We are requiring Form 70D to include specific information in the four fields located at the top of the Additional Comments Section on Page 3 of the appraisal report to ensure accurate delivery and monitoring of desktop appraisal reports. The following table identifies the specific fields and the information that each field must contain. The appraisal will reflect the appropriate selection based on whether the appraiser has performed a prior appraisal on the subject property and is using that information to complete the current desktop assignment or has not completed a prior appraisal on the subject property and is relying on information from other sources (e.g., tax data, MLS, data cooperatives, etc.).

Appraisal Assignment Type	Subject Property Data Collection Method (how did the appraiser obtain information about the subject property?	Workforce	Subject Property Data Collection Date (effective date of prior appraisal)
Desktop Appraisal 70D/1004Desktop	Prior URAR The appraiser completed a prior interior and exterior inspection appraisal. The appraiser may also rely on information from other sources (e.g., tax data, MLS, data cooperatives, etc.)	Null	YYYY-MM-DD From prior appraisal (inspection date which = Effective Date)
Desktop Appraisal 70D/1004Desktop	Prior Hybrid The appraiser completed a prior hybrid appraisal. The appraiser may also rely on information from other sources (e.g., tax data, MLS, data cooperatives, etc.)	Null	YYYY-MM-DD From PDR used in prior hybrid (inspection date = date of PDR)
Desktop Appraisal 70D/1004Desktop	Other The appraiser has not completed a prior appraisal and is relying on information from other sources (e.g., tax data, MLS, data cooperatives, etc.)	Null	Null

When a desktop appraisal is used to value the subject property, is an Appraisal Identifier required for ULDD Sort ID 82?

Yes. Whenever an appraisal is used to value the mortgaged premises, the Seller must deliver ULDD Data Point 82, Appraisal Identifier.
[NEW October 9, 2023] If the Seller chooses to not accept a desktop appraisal when offered on the Feedback Certificate, what collateral assessment options are available to meet our eligibility requirements?

The Seller may provide an interior and exterior inspection appraisal report (Form 70) to satisfy the collateral requirements for the Mortgage provided the eligibility requirements for Form 70 are met.