Freddie Mac Announces Permanent Acceptance of Desktop Appraisals
Written By: Joel Palmer, Op-Ed Writer
Freddie Mac announced several recent updates to its Selling/Servicing Guide, including the option of using desktop appraisals for mortgages that meet certain requirements.
The change to the desktop appraisal option is “based on the success of the temporary COVID-19 appraisal flexibilities and a market appetite for appraisal options that do not require physical inspections,” Freddie wrote in its latest bulletin.
The desktop appraisal, completed on new Guide Form 70D, Uniform Residential Appraisal Report, will be available beginning March 6, 2022 for new loan applications and resubmissions to Loan Product Advisor. This report is similar in format to Form 70 and will require many of the same exhibits. However, a specific requirement of Form 70D is that the appraiser must provide a floor plan in addition to a building sketch.
Desktop appraisals can be used under eligibility requirements listed in Guide Section 5601.7, which include:
The mortgage must be an Accept Mortgage and must receive a feedback message in Loan Product Advisor indicating that it is eligible for delivery with a desktop appraisal.
The mortgage must be a purchase transaction mortgage secured by a 1-unit primary residence, including a unit in a Planned Unit Development.
The mortgage must have a loan-to-value (LTV) ratio less than or equal to 90 percent. For purposes of qualifying for a desktop appraisal, this LTV ratio is calculated using the sales price. Freddie Mac will accept mortgages originated with a desktop appraisal with an LTV ratio higher than 90 percent as calculated using the value obtained from the desktop appraisal if the loan amount does not increase and all other eligibility requirements are met, including the requirement that the LTV ratio calculated using the sales price is less than or equal to 90 percent. LTV ratios greater than 90 percent that occur as a result of loan amount changes require an upgrade to an interior and exterior inspection appraisal.
Freddie also announced in a separate bulletin that, effective immediately, temporary requirements for self-employment income have expired.
About the Author
As an NAMP® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
