Fannie Mae and Freddie Mac have followed up on their promise to make one of the appraisal flexibilities introduced during the pandemic a permanent part of their operations. As part of their adoption of modern appraisal methodologies, the two major government-related mortgage investors will add Desktop Appraisal messaging to their automated underwriting systems in March. Freddie’s system feedback will indicate whether desktop appraisals can be submitted starting on March 6. Fannie plans to roll them out as part of an update to its AUS during the weekend of March 19.
AppraisalTek is committed to supporting lenders in the adoption of 1004 Desktop appraisals.
The 1004 Desktop appraisal guidelines are a bit different than the COVID-19 desktop guidelines. The 1004 Desktop guidelines specify that a purchase transaction must have a loan-to-value ratio less than or equal to 90% and be a one-unit, principal residence. In addition, the 1004 Desktop must take into consideration a detailed floor plan with interior walls and gross living area (GLA) calculations:
“The minimum scope of work for Form 1004 Desktop does not include an interior and exterior on-site physical inspection of the subject property or comparable sales by the appraiser; instead, the appraiser relies on data obtained from alternative sources to identify property characteristics and condition. Form 1004 Desktop requires the use of a floor plan in addition to other exhibits required for traditional appraisals.”
The Selling Guide change offers a solution to the concerns the lending industry and consumers raised during the appraisal process. Modern valuation products like the 1004 Desktop appraisals enable an appraisal process that is time-efficient without sacrificing quality or thoroughness.
Appraisers also benefit from the 1004 Desktop workflow. The pairing of modern technology and a redesigned process enables appraisers to complete 1004 Desktop appraisals without conducting a physical inspection, potentially shortening appraisal turn-times and easing appraiser capacity constraints. Desktop appraisals also provide a great opportunity for appraisers who would rather not or are unable to go into the field.
AppraisalTek has designed, developed, and tested technology in preparation for the efficient processing of the 1004 Desktop. We have the technology and trained network of property data collectors, and experienced appraisers that lenders will need to seamlessly adapt to the change. AppraisalTek can provide floor plans with interior walls and digital GLA calculations that are compliant with ANSI standards and a complete 1004 Desktop appraisal lenders can trust. Interested in learning more? Reach out to us at 877-716-5162.
Vice President of Valuation Strategy
As of April 1, 2022, Fannie Mae will require appraisers to measure, calculate and report the gross living area and non-gross living area using ANSI® Z765-2021, which only applies to one- unit properties. According to the Announcement, “Appraisals requiring interior and exterior inspections must follow this standard; appraisals of this type performed without using this standard will not be acceptable.”
Appraisers and lenders can purchase a PDF version of ANSI® Z765-2021 by visiting: https://www.homeinnovation.com/z765
Consistency in reporting. No two appraisers are alike and inconsistencies in reporting gross living area (GLA) abounded. There was no standard for how an appraiser arrived at the GLA despite how extremely important it is in the value of a dwelling. Standardizing the method in which appraisers measure, calculate and report living areas insures a level of certainty.
According to FNMA, when using sketching or 3D scanning software, the resulting output must also conform to the Square Footage-Method for Calculating: ANSI® Z765-2021 standards.
Here are some bullet points that can be found on the FNMA website:
Interested in learning more? Reach out to us at 877-716-5162.
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- Robert Oglesby, SRA, AI-RRS, ASA, AppraisalTek President, AQB Certified USPAP Instructor