Fannie Mae Updates Guidance on Flexible Appraisal Requirements
Fannie Mae recently updated its Lender Letter on new flexible appraisal requirements (LL-2020-04) on April 14, 2020. The Lender Letter was originally published on March 23, 2020, announcing temporary flexibility in the Fannie Mae appraisal requirements as a response to the COVID-19 national emergency.
The revisions add to the guidance temporary flexibilities for project eligibility reviews on condominium projects. For certain condominium units and transactions, Fannie Mae is expanding these flexibilities for loans with LTV ratios greater than 80%, up to 90%, subject to specified requirements. The revised guidance also authorizes virtual inspection methods for certain appraisals and renovation loans, subject to specified limitations.
The revised Lender Letter also updates previously issued guidance on (i) flexibilities for new construction loans; (ii) flexibilities for HomeStyle Renovation loans; (iii) flexibilities for temporary appraisal requirements; and (iv) additional form instructions for appraisals. For example, the update clarifies the continuing applicability of existing requirements. For new construction loans, lenders must still adhere to the temporary appraisal requirement flexibilities’ LTV ratio requirements, and for HomeStyle Renovation loans, specifically those in forbearance, the update specifies that all program requirements continue to apply. Further clarifications include, for example, language restrictions in the Map Reference field on the Appraisal Report for appraisals using the flexibilities provided in the Lender Letter.
