Appraisals

Mortgage Appraisal/Complete Fannie Mae Report/Full Appraisal Report

The mortgage appraisal is usually used for a first mortgage loan in which a borrower is purchasing a single-home dwelling, removing PMI insurance, or refinancing a home.  It is also called a complete Fannie Mae report or a full appraisal report.  The form used is a Uniform Residential Appraisal Report, which is also known as a Fannie Mae Form 1004.  This type of appraisal is a two-page report that has maps, floor plans, and photograph attachments.

Home Equity/Second Mortgage Appraisal Report

The home equity or second mortgage appraisal is used for debt consolidations, equity cash outs, home improvement loans, and home refinances.  With these reports, interior inspections are completed and measurements are taken.  The forms used are either FNMA 1004, 2055, 2065, or FHLMC 704

Desktop Underwriter Quantitative Analysis Report (FNMA 2055)

This appraisal is typically used for loans of single-family dwelling purchases and for home refinances.  The report’s adjustment grid compares the comparable sales to the subject property.  This comparison reflects specific dollar adjustments, thus allowing the report to give a specific indicated market value.  The report consists of three-pages that can be completed as an exterior only inspection or as an interior and exterior inspection.

This is a mortgage appraisal that can be used for refinancing a single-family dwelling or for a home equity loan.  The report shows a comparison of the subject in terms of superior, equal, inferior, and no single market value given.  A negative relationship is shown in the report’s adjustment grid when the comparable is superior to the subject.

The Land Appraisal Report is a descriptive one-page report of vacant land only.  It describes the subject property, neighborhood, and site.  The Market Data Analysis provides a list of comparable sales for the subject.  The Reconciliation provides the indicated market value of the site.

A drive-by appraisal can be used by lenders when there is a range in the property’s value and the loan amount, home refinances, home equity loans, and in some second mortgages.  Because these appraisals do not require an interior inspection or measurements, some information is needed about the property before completing the report.  The forms used are the Advantage Appraisal, FNMA 2065, FNMA 2055, or FHLM 704.

The appraisal report can be used for a multi-family dwelling where the income being produced is used for considering its market value.  The Small Residential Income Property Appraisal Report, which is also called the Fannie Mae Form 1025, is used to complete this type of appraisal.  It is a four-page report that usually has maps, floor plans, and photograph attachments.

The Employee Relocation Council Residential Appraisal Report, or ERC, is used when an employee of a national company is transferring, purchasing, or selling a home.  It is a six-page report that requires competitive listings, comparable sales, maps, floor plans, and photograph attachments.

When determining the marketability of a property, a foreclosure valuation can be used.  An exterior inspection is completed, and whenever possible, an interior inspection is done.  Two conclusions can be developed from the inspection, an “as is” or “subject to repairs”.  If “subject to repairs” is the conclusion, then a list of needed repairs and their costs are supplied.  An URAR, also called FNMA 1004, is used for REO valuations along with appropriate attachments.

The final inspection is completed after the completion of a newly built or renovated home.  If the home is not completed as planned, a list of components that are to be completed is provided.  In some cases, the costs of the components may be given as well.  A final inspection uses the FHLMC Form 442.

Using the Fannie Mae 2000 form, a field review is completed by conducting a visual inspection of the subject and validating an existing appraisal.

A desk review requires a verification of an existing appraisal without the need of a visual inspection.  The form used is a FNMA 2006.  It can be performed on any type of appraisal.

Operating Income Statements are typically desired on investment property loans.  The annual income and expense projections, including a replacement reserve schedule, are recorded on the two-page Fannie Mae 216 form.

Lenders for loans on investment properties can use a single family comparable rent schedule.  It provides a format to assess the market rent of the subject’s property.  The two-page form used is the Fannie Mae 216.

When an appraisal on the subject has been completed within the recent past, but assurance is required to verify that no major changes have occurred since the original appraisal, a re-certification can be done on the subject. Rather than a form being used, the re-certification is recorded in a letter format addressed to the lender and/or client.

This type of report provides a verification of the property, characterization of the neighborhood, examination that the property conforms to zoning restrictions, and a description of the property’s conditions.  The FNMA 2075 is the form that is used when an appraisal is not needed.  The report does not give a value estimate, and is often used in addition to an automated or computer generated valuation.

The mortgage appraisal is usually used for first mortgage loans in which the borrower is purchasing or refinancing a small commercial property.  This is called a commercial form appraisal. 

This report is usually performed on larger and more complex commercial properties, as well as larger tracts of land.