202.01E

Lender Appraisal Review

Requirements

Your employees must:

  • review and approve each AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. for adequacy and compliance; and
  • ensure the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. includes:
    • an accurate description of the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). and the market, including:
      • the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). complete legal description;
      • any information you provided the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. ;
      • color photographs of the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code).
        • exterior,
        • interior common areas,
        • typical unit interiors,
        • surrounding area,
        • rental comparables,
        • sales comparables, and
        • commercial rental comparables;
      • maps showing the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). location relative to the location of the
        • land comparables,
        • current rental comparables,
        • future rental comparables, and
        • sales comparables;
      • qualifications of the
        • AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. , and
        • any supervising AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. ; and
      • a copy of your
        • complete signed engagement letter with the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. , and
        • communications with the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. regarding the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. scope;
    • an opinion of the Property'sProperty'sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). value per Part II, Chapter 2: Valuation and Income, Section 202.02A: Appraised Value, and supported by
      • market data,
      • logical analysis, and
      • sound professional judgment;
    • an opinion of the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). insurable value; and
    • an industry standard form of AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. appropriate for the Mortgage Loan’sMortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement.
      • size, and
      • structure.

You must:

  • return any report to the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. that:
    • is incomplete; or
    • lacks credibility; and
  • ensure your AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. review:
    • is documented in the Transaction Approval Memo;
    • is accompanied by all other AppraisalsAppraisalsWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. you ordered on the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). during the past 3 years; and
    • includes all information per the following Appraisal Analysis table.
Appraisal Analysis
For... You must...
Market Conditions

Confirm the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. accounts for current market conditions, including

 

  • supply and demand dynamics,
  • interest rates, and
  • economic factors.
Data Accuracy

Verify the Appraisal’sAppraisal’sWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. data accuracy, including

 

  • PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). details,
  • recent sales prices, and
  • relevant market data.
Property Inspections Determine if the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. conducted a thorough inspection of the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , including random sampling of occupied and vacant units per Instructions for Appraisers (Form 4827).
Sales/Rental Comparable Analysis
  • Determine if the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. used appropriate comparable properties similar in:
    • size and/or unit count (on both a per-unit and a per-square foot basis);
    • type (e.g., high-rise, mid-rise, garden, etc.);
    • age;
    • condition;
    • in-unit finishes;
    • amenities;
    • location, including
      • market,
      • submarket, and
      • distance to subject; and
    • sales of comparable properties, with at least 1
      • being a listing/pending sale, or
      • sold within 24 months of the Appraisal DateAppraisal DateEffective date of value in the Appraisal. .
  • If appropriate comparable properties were not used, either:
    • coordinate with the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. to obtain additional comparable properties; or
    • provide the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. additional comparable properties from AppraisalsAppraisalsWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information.
      • for any prior transactions you originated within the last 12 months before the Appraisal DateAppraisal DateEffective date of value in the Appraisal. , or
      • from any external data sources verifiable by the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. .
Market Rents and Expense Analysis If the Appraiser’sAppraiser’sPerson engaged to estimate a Property’s market value per USPAP. proforma income or expenses substantially differ from the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). income and expenses used to calculate the Underwritten NCFUnderwritten NCFNet Cash Flow as adjusted by the Lender per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. , provide additional supporting comparable property data or rationale supporting your conclusions.
Capitalization Rate Analysis

Provide your assessment that the capitalization rate:

 

  • supports your final Underwriting ValueUnderwriting ValueValue of the Property determined by the Lender to size the Mortgage Loan per Part II, Chapter 2: Valuation and Income, Section 202: Appraisal and Valuation. ; and
  • is within comparable capitalization rates compared to
    • your portfolio data, or
    • any other external data sources you use to review appraisals.
Value Reconciliation
  • Review how the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. reconciled the values obtained from different approaches to determine the final opinion of value.
  • Document your assessment.

For each AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. , you must ensure all: