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Freddie Mac Issues Important Update on GSE Appraisals

by Todd Paradis | May 06, 2020
 
News from Freddie Mac

As we are examining the appraisal reports that are being submitted under the COVID-19 flexibilities, the number one issue we are seeing is related to exterior only appraisals and the analysis/reporting of the interior condition.

For GSE work, it is NOT acceptable to simply assume that the interior condition is “average.” Nor is it acceptable to assume that the interior condition is similar to the exterior condition. Many non-GSE users do allow (and even instruct that) appraisals completed with such assumptions, but these assumptions are not acceptable for GSE work.

The appraiser MUST have a data source for the interior condition. The data sources could include any of the types of sources normally used for comparables. Or, under the revised COVID-19 certs, the data could include information provided by the owner, occupant, agent, etc.

If one cannot obtain a data source for the interior condition, then the appraisal should not be completed. However, the intent of adopting the revised certifications and allowing use of data by the property owner was to minimize the number of cases where the appraiser could not obtain such data.