Desktop Appraisal FAQ

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.

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^®).

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.

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.

Yes, provided it includes exterior dimensions that the appraiser can use to verify the finished and unfinished areas of the subject property.

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.

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.

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.

No, additional verification of authenticity is not required when information is obtained in this manner.

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.

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.

The effective date of a desktop appraisal is the date that the appraiser completes their analysis, opinions, and conclusions.

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.

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).

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.

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.

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 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).

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.

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 Form 442 is Form 400, Warranty of Completion of Construction or Repairs/Alterations, completed by the borrower and the builder to evidence completion of the improvements.

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

The Seller will need to verify that the incomplete item(s), required repairs, or item(s) requiring inspection have been satisfactorily completed or inspected. This will require, as applicable, either:

• Form 442, completed by the appraiser, confirming completion of construction or repairs;
• Form 400, completed by the borrower(s) and builder, if applicable, confirming completion of construction or repairs; or

• A signed report or invoice(s), completed by an inspector, stating no repairs are required or repairs have been completed.

   

See Guide Section 5605.8 for requirements to verify completion.

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

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.

No. Unlike other appraisal reports, a desktop appraisal can only be used for a purchase transaction.

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.

Yes. Whenever an appraisal is used to value the mortgaged premises, the Seller must deliver ULDD Data Point 82, Appraisal Identifier.

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.