Definition
Fannie Mae Form 1004 (Uniform Residential Appraisal Report): This is a detailed standard form used by appraisers to evaluate and report the appraised value of single-family homes. The form includes data on the property’s condition, the neighborhood, comparable sales, and the type of house (such as detached, semi-detached, or townhouse). Its comprehensive sections gather necessary data to ensure an accurate appraisal aligned with Fannie Mae’s guidelines.
Fannie Mae Form 2055 (Exterior Only Inspection Residential Appraisal Report): Unlike Form 1004, this form is used for drive-by appraisals or exterior-only inspections where a full interior examination is not conducted. It is less comprehensive and is typically used when a less detailed evaluation is needed. This form includes information about the property’s exterior condition, site, improvements, and general market data to support the estimated market value.
Examples
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Loan Approval: When a homeowner applies for a conventional loan to purchase a new home, the mortgage lender requests an appraisal using Fannie Mae Form 1004 to establish the property’s market value for lending purposes.
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Refinancing: A homeowner looking to refinance their mortgage might need a drive-by appraisal, for which Fannie Mae Form 2055 will be used. This gives the lender a reassured but general estimate of value based on an exterior evaluation.
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Property Sale: In a scenario where the property is being sold without thorough interior access, a real estate agent might use the information from a Form 2055 appraisal to help determine a more accurate listing price.
Frequently Asked Questions
Q: Why would an appraiser use Form 2055 instead of Form 1004? A: Form 2055 is used for exterior-only inspections when a Lender requires an appraisal that involves less detailed, less intrusive form methodology. This can be for loan modifications, home equity lines of credit, or situations where a full interior inspection is not essential or possible.
Q: What kind of properties are appraised using Form 1004? A: Single-family residences, including detached and semi-detached homes and townhouses, are the primary target for Form 1004 appraisals. This form provides a comprehensive assessment required for most mortgage purposes.
Q: Does Fannie Mae Form 2055 include an interior inspection? A: No, Form 2055 is strictly an exterior-only inspection. It does not involve entering the interior of the property.
Q: Can both forms be used for commercial properties? A: No, these forms are specifically designed for residential properties. Commercial properties have separate appraisal forms and guidelines.
Q: How often should a property be appraised using Form 1004? A: There is no set frequency for appraising a property using Form 1004; it typically depends on specific circumstances; e.g., purchasing, refinancing, or assessing current market conditions.
Related Terms with Definitions
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Uniform Residential Appraisal Report (URAR): A document also known as Fannie Mae Form 1004, used for appraising single-family residential properties. It includes comprehensive information about the property being appraised.
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Appraised Value: The market value of a property as assessed by a licensed appraiser based on market conditions, comparable sales, and the property’s condition, features, and location.
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Drive-by Appraisal: An appraisal method where the appraiser evaluates the property’s exterior from the street rather than performing a full interior inspection.
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Comparable Sales: Previously sold properties that are similar in size, condition, location, and features used to help determine the market value of another property through appraisal.
Online Resources
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Fannie Mae Official Website - Resources, guidelines, and updates regarding forms and appraisal practices.
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Appraisal Institute - Provides resource materials, educational courses, and informative articles on appraisal standards.
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The Appraiser Coach Blog - Blog articles and discussions focused on practical tips and insights for professional appraisers.
References
- Fannie Mae. (2023). Uniform Residential Appraisal Report (Form 1004)
- Fannie Mae. (2023). Exterior-Only Form Report (Form 2055)
- Appraisal Institute. (2022). Appraising Residential Properties
Suggested Books for Further Studies
- “The Appraisal of Real Estate” by Appraisal Institute - An essential resource offering comprehensive coverage on valuation principles and practices.
- “Mastering Real Estate Appraisal” by Dennis H. Carr - Focuses on techniques and methodologies relevant to current standards in real estate appraisal.
- “Real Estate Appraisal: From Value to Worth” by Davidson M. and Mallinson M. - Discusses valuation from a practical and theoretical approach beneficial to both novices and experienced appraisers.
