New rules for residential appraisers starting Sept. 1

New rules standardizing residential appraisers’ reports for any deal backed by Fannie Mae or Freddie Mac go into effect Sept. 1. The Uniform Appraisal Dataset is meant to improve the quality and consistency of appraisal data on conventional mortgage loans sold to Fannie or Freddie. For example, instead of calling the condition of a house “average,” or whatever the case may be, appraisers will be required to rate the property’s condition on a defined scale from C1 [brand new] to C6 [severe deficiencies or defects that could affect the safety of the occupants]. “We may call something ‘average’ here, and in California they may call our average ‘good,’ ” says Kelly Johnson, president of the Louisiana Chapter of the Appraisal Institute. “That’s basically a good thing, as far as standardization of the terminology and the input of the form. … It’s going to be a real hassle for the appraisers and the lenders.” Appraisers will need new software, and the process will take more time, he says, adding the rules apply to single-family houses, condos and townhouses but not to commercial properties. For the rest of Real Estate Weekly, click here. —David Jacobs