Fannie Mae Update to Lender Letter 2020-04 COVID-19 impact on appraisals
Fannie Mae has updated Lender Letter LL-2020-04 to extend the temporary appraisal flexibilities until June 30th.
In addition, Fannie Mae is reminding appraisers of the allowed requirements pertaining to virtual inspections for appraisals and renovation loans. Appraisers may use virtual inspection methods to augment the data and imagery that is used for either a desktop appraisal or an exterior-only appraisal. All traditional appraisals require the appraiser to perform a complete onsite interior and exterior inspection of the property. A virtual inspection cannot be used as a substitute for the onsite interior and exterior inspection for a traditional appraisal. Additionally, an onsite interior and exterior inspection is required for the Appraisal Update and/or Completion Report (Form 1004D) used to confirm completion of renovation for HomeStyle Renovation loans. Virtual inspections using video and photographs provided by the borrower or contractor can be used to evidence renovation progress to disburse additional renovation funds.
So what loan criteria would require a traditional appraisal (no alternative appraisals such as desktops or exterior-only allowed)?
A traditional appraisal with an interior and exterior inspections are required for all of the following:
- second home purchase transactions with LTV ratios > 85%,
- limited cash-out refinance transactions when the loan being refinanced is not owned by us, and
- cash-out refinance transactions
Click on link below to read full Fannie Mae update: