This Bulletin has been updated to include additional information provided by Fannie Mae/Freddie Mac; refer to highlight below
Fannie Mae and Freddie Mac announced temporary flexibilities to appraisal requirements due to the COVID-19 emergency that are effective immediately and will remain in place for loans with an application date on or before May 17, 2020.
Fannie Mae and Freddie Mac updated policy is detailed below. Requirements vary based on transaction type (purchase/rate/term/cash-out), occupancy type (owner-occupied/ 2nd home/investment) and LTV.
Fannie Mae/Freddie Mac Purchase Transactions (including new construction)
- Primary Residence Purchase regardless of LTV:
- Traditional appraisal (interior/exterior inspection), or
- Desktop appraisal, or
- Exterior-only appraisal (N/A new construction)
- Second Home and Investment Purchase ≤ 85% LTV:
- Traditional appraisal (interior/exterior inspection), or
- Desktop appraisal, or
- Exterior-only appraisal (N/A new construction)
- Second Home Purchase > 85% LTV:
- Traditional appraisal (interior/exterior inspection) required
Fannie Mae/Freddie Mac Limited Cash-out (Rate/Term) Transactions
Requirements are determined by whether the loan being refinanced is currently owned by Fannie Mae or Freddie Mac:
- Fannie Mae or Freddie Mac OWN the loan being refinanced:
- Traditional appraisal (interior/exterior inspection), or
- Exterior-only appraisal
- Fannie Mae or Freddie Mac DO NOT OWN the loan being refinanced:
- Traditional appraisal (interior/exterior inspection) required
- To determine if Fannie Mae owns the loan click here: FNMA Loan Lookup
- To determine if Freddie Mack owns the loan click here: FHLMC Loan Lookup
The appraisal flexibilities detailed above do not apply to the following transactions:
- Fannie Mae Home Style (traditional appraisal and 1004D, as applicable, still required), or
- Construction-to-perm loans; there is no change to current appraisal requirements
Fannie Mae/Freddie Mac Cash-Out Transactions
Regardless of who owns the loan being refinanced:
- Traditional appraisal (interior/exterior inspection) required
Completion Reports (Form 1004D): Excluding HomeStyle
Transactions that require Form 1004D, and the 1004D cannot be obtained, the following is acceptable to verify completion of required repairs:
- A letter, signed by the borrower, confirming all work has been completed, and
- Photographs of the completed work, or paid invoices, or occupancy permit(s), or similar documentation that confirms the work was completed is required
Fannie Mae Appraisal Waivers and Freddie Mac ACE Offers
Appraisal waivers and ACE offers may continue to be accepted when offered by DU or LPA; refer to the applicable guidelines for standard requirements
Transactions Requiring Mortgage Insurance MI
Homebridge Underwriting will confirm the applicable MI company will accept the appraisal option selected. The MI providers are aware of Fannie Mae and Freddie Mac’s appraisal flexibilities.
Desktop Appraisal Requirements
The following applies:
- Forms 1004, 1073, 1025, 1004C as applicable
- Inspection of subject/comparables not required, and
- Location map showing the location of subject and comparables, and
- Photos of subject property
Exterior-only Appraisal Requirements
The following applies:
- Forms 2055,1075, 1025, 1004C as applicable
- Location map showing the location of the subject property and all comparable sales, and
- Photos of the subject property
An Appraisal Quick Reference Guide is attached (refer to the PDF) to the Bulletin and it will also be posted on the Homebridge website at www.HomebridgeWholesale.com under “Miscellaneous
