Changes to Appraisal Valuation | Fannie Mae No Longer Requires 1004MC
On July 31st at the Appraisal Institute Annual Conference, Fannie Mae announced that it would no longer require the 1004MC form for home appraisal valuation. On August 7th, Fannie Mae’s Selling Guide indicated the form was unnecessary, effective immediately.
Introduced in 2009 following the housing crisis, the form standardized appraisal reporting and market conditions analysis to help lenders and other clients better understand market trends and conditions prevalent in relevant neighborhoods.
Fannie Mae explained the Collateral Underwriter, a property appraisal review tool created by Fannie Mae to help mortgage lenders manage risk, provides “robust market trend information for lenders and Fannie Mae, enabling measurement and management of market risks” and rendering the 1004MC form obsolete.
Appraisers must still support their conclusions on property value movement — whether properties in a neighborhood are stable, increasing or declining — as well as their opinions of market trends, supply and demand and marketing times. The guide announces, “appraisers remain responsible for analyzing market conditions and accurately reporting them in the Neighborhood section of our appraisal forms.”
Although Fannie Mae no longer requires the form, Freddie Mac and the Federal Housing Administration have made no similar announcement. However, Freddie Mac has implied that it will soon follow suit.
Many lenders still require the 1004MC form, and Janus AMC will continue to do so until lenders remove it from their requirements.