Simplified Agency Appraisal Requirements

April 10, 2020rashtonBulletin

Overview

Here is a simplified guide to help evaluate the permissible Agency appraisal and form requirements during the COVID-19 crisis.  Effective immediately, and until further notice, all loans submitted to Carrington Mortgage Services, LLC (CMS) must follow these new procedures.

Permissible Appraisal Requirements

Loan Type Other Criteria Exterior-Only Allowed Desktop Allowed
CONV Purchase, Primary Residence Yes Yes
Purchase, 2nd Home / Investment

LTV <= 85%

Yes Yes
Purchase, 2nd Home

LTV > 85%

No No
No Cash-out Refinance

Fannie/Freddie Owned

Yes6 No
No Cash-out Refinance

NOT Fannie/Freddie Owned

No No
Cash-out Refinance No No
New Construction4,5 No Yes
FHA3 Purchase Yes Yes
Rate/Term and Simple Refinances Yes No
Cash-out Refinance No No
203(k) Purchase and 203(k) Refinance No No
VA Purchase Yes1 Yes2
Cash-out Refi Yes1 Yes2
USDA All Yes No
All Gov’t New Construction No No

1 Appraisers must boldly and inconspicuously state “Per Department of Veterans Affairs, no interior inspection was provided due to COVID-19.”

2 Use of Assisted Appraisal Processing Program (AAPP) is not authorized for Desktop appraisals. Value must not exceed the 2020 Freddie Mac Conforming Loan Limit for a one-unit limit for the subject’s county.

3 FHA 1004D Part B Completion Report:  FHA will permit a letter signed by the borrower affirming that the work was completed with further evidence of completion, which may include photographs of the completed work, paid invoices indicating completion, occupancy permits, or other substantially similar documentation.

4 Builder Certification:  The Lender must obtain a builder signed certification, Attachment A, Builder/Contractor Certification, attesting that the information provided is true and correct. This certification must be included in the Mortgage file.

5 Completion Reports for New Construction Properties:  For new construction properties where the appraisal report was completed “subject to completion per plans and specifications,” if the Lender is unable to obtain a completed Appraisal Update and/or Completion Report (Form 1004D) as a result of COVID-19 related issues, FNMA will accept the Completion of Construction Certification.

6 The subject must be refinanced with the same agency that owns the current mortgage

Appraisal Valuations Form Requirements

Loan Type Exterior Only Appraisal Form Desktop Appraisal Form
VA Conventional Use Exterior-Only form for:

·       Form 2055/466 – SFR or PUD

·       Form 1075/72 – Condo

Use Traditional form for:

·       Form 1025/72 – 2-4 Units

·       Form 1004C/70B – Manufactured

Use traditional form for all types:

·       Form 1004/70 – SFR or PUD

·       Form 1073/465 – Condo

·       Form 1025/72 – 2-4 Units

·       Form 1004C/70B – Manufactured

FHA Use traditional form for all types:

·       Form 1004/70 – SFR or PUD

·       Form 1073/465 – Condo

·       Form 1025/72 – 2-4 Units

·       Form 1004C/70B – Manufactured

Use traditional form for all types:

·       Form 1004/70 – SFR or PUD

·       Form 1073/465 – Condo

·       Form 1025/72 – 2-4 Units

·       Form 1004C/70B – Manufactured

USDA Use Exterior-Only form for:

·       Form 2055/466 – SFR or PUD

·       Form 1075/72 – Condo

Use traditional form for all types:

·       Form 1004/70 – SFR or PUD

·       Form 1073/465 – Condo

 

Loan Type Exterior Only Appraisal Form Desktop Appraisal Form
All Types Exhibits Required

1.     a street map that shows the location of the subject property and of all comparable sales that the appraiser used;

2.     clear, descriptive photographs (either in black and white or color) that show the front of the subject property, and that are appropriately identified (photographs must be originals that are produced either by photography or electronic imaging); and

3.     any other data−as an attachment or addendum to the appraisal report form−that are necessary to provide an adequately supported opinion of market value

Exhibits Required

1.     a location map indicating the location of the subject property and comparable sales, and

2.     photographs of the subject property. It may be challenging in some instances to obtain photographs; however, it is expected that the appraiser utilize available means to obtain relevant pictures of the subject property.

Contacts

Please contact your Account Executive or Account Manager with any questions.

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