On March 23, 2020, Fannie Mae published Lender Letter LL-2020-04 regarding the impact of Coronavirus COVID-19 on appraisals. In many cases, due to COVID-19, lenders are not able to obtain appraisals based on a full interior and exterior inspection of the subject properties. Fannie Mae is working together with Freddie Mac under the guidance of the Federal Housing Finance Agency (FHFA) to allow temporary flexibilities to their appraisal requirements. LL-2020-04 covers the following items and will updated and republished as new guidance becomes available:
- Temporary appraisal requirement flexibilities: Allowing exterior-only inspection appraisals or desktop appraisals.
- Desktop appraisals: Allowing for purchase transactions when an interior and exterior appraisal is not available.
- Exterior-only inspection appraisals: Allowing for purchase and refinances of Fannie Mae-owned loans.
- Revisions to the scope of work, statements of assumptions and limited conditions, and appraiser’s certifications: Requiring modified language to be used with exterior-only and desktop appraisals.
- Additional form instructions for appraisals: Requiring identification of “exterior” or “desktop” on the interior and exterior reports.
- Identification of a Fannie Mae loan: Reminding lenders about our Loan Lookup tool to identify Fannie Mae-owned loans.
- Appraisal waivers: Encouraging lenders to accept waiver offers when eligible.
- Delivery requirements: Changes are not required at this time in Loan Delivery
- Completion reports (Form 1004D): Allowing alternatives when a Form 1004D cannot be obtained
- HomeStyle® Renovation and HomeStyle Energy requirements: Requiring traditional appraisals for these transactions
These temporary flexibilities are effective immediately for all loans in currently in process and will remain in place for loans with application dates on or before May 17, 2020.