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FNMA FAQs published November 2009 regarding Updated Policies and the 1004MC
FNMA Selling Guide - Part 11 (searchable)

Certification #10

Certification #10 reads:

”I verified, from a disinterested source, all information in this report that was provided by parties who have a financial interest in the sale or financing of the subject property.”

If you get the contract from an agent, buyer, or seller; its content must be verified with the lender or the appraiser must make a statement in the report that the integrity of the contract could not be verified and that the appraisal is based on the extraordinary assumption that the version of the contract received is a copy of the actual contract.

Certification #12 - Data Sources

FNMA Certification #12 says:

"I am aware of, and have access to, the necessary and appropriate public and private data sources, such as multiple listing services, tax assessment records, public land records and other such data sources for the area in which the property is located."

Comments and Conclusions:

The appraiser must have access to necessary and appropriate public and private data sources for the area in which the property is located.  At a minimum, Metro Atlanta appraisers MUST have access to MLS, FMLS, RedLink, and GSCCCA.org.

In addition, GREAB Regulations require that the appraiser:

"Obtain all data used in every appraisal from a reliable source and verify that data from at least one additional reliable source.  For purposes of this Chapter a reliable source shall be one typically utilized by appraisers in the area..." (GREAB Rules as amended August 1, 2006, page 5)

So not only does FNMA, Certification #12 require that the appraiser be familiar with the appropriate data sources but so does the GREAB.

USPAP has always required access to appropriate data (See AO24, USPAP 2006).

Certification #11 - Competency

The Competency Rule of the USPAP allows an appraiser to accept an assignment even though he/she is not competent to do the appraisal provided that:

1. The appraiser disclose the lack of competency before accepting the assignment.
2. The appraiser takes the necessary steps to complete the assignment competently.
3. The appraiser disclose the lack of competency and the means of overcoming the lack of competency in the report.

FNMA, on the other hand, DOES NOT permit an appraiser to do an appraisal unless he/she is competent with respect to the market area and property type.

Certification #11 on the URAR and similar forms says:

"I have knowledge and experience in appraising this type of property in this market area."

Conclusion: FNMA requires that an appraiser turn down any appraisal in which he/she is not qualified to perform.

The FNMA 704

Is the FNMA 704 suitable for a "drive-by" appraisal?

The FNMA 704 is a practical, if not a preferred method, of reporting a drive-by appraisal for a transaction that is not mortgage related.  The old 2055 has problems because of its use of the obsolete terms "departure", "limited appraisal", and "complete appraisal".  The new 2055 has a problem in that it's purpose is for a mortgage related transaction.

USPAP, Standard 2 says:

"STANDARD 2 does not dictate the form, format, or style of real property appraisal reports.  The form, format, and style of a report are functions of the needs of intended users and appraisers.  The substantive content of a report determines its compliance."

The 704 has no canned certifications, scope of work, statement of assumptions and limiting conditions, intended use, or intended user statements.  All these are required in the appraisal report and must be prepared for the specific assignment providing the appraiser with maximum latitude within the limits set by USPAP and GREAB rules.