To help our clients choose the appraisal product best suited for their purpose, we have compiled a list of what we offer and where these products are best applied. In special situations, a Narrative Appraisal Report may be needed, but in general, a report completed on standardized forms is sufficient.
Federally Related Transactions -- those which involve most lenders -- have as a requirement that the client must order the appraisal. This means that an appraisal ordered by a borrower cannot legally be used for mortgage lending purposes. The lender, or his agent (in most cases the agent is an appraisal management company) must order the appraisal. All of our appraisal reports will state who ordered the appraisal, who the intended user is, and the specific intended use of the report; disclosure of these facts is required by law. In the event the report is ordered as a restricted report, such disclosures will not be in the body of the report but will be incorporated by reference to the appraiser's workfile.
In 2005 Fannie Mae released revised residential appraisal reports which state specifically that they are to be used for mortgage lending purposes and which have, pre-printed in the report, the statement that the date of the appraiser's examination of the subject property is the effective date of the value opinion, and other conditions and certifications specific to the needs of FNMA. The 2005 FNMA reports are not suitable for any report in which a retrospective value opinion is required, and should not be used for any purpose other than a Federally Related mortgage transaction. If a client requires that the 2005 FNMA forms be used for any other purpose, the report will be clearly labeled Restricted Use Appraisal Report and will incorporate addendum language to override the forms' preprinted statements, conditions, and certifications, as appropriate.