Washington Report

Advocacy Updates from Washington D.C.

NAR Comments on GSE Appraisal Waivers

On September 12, 2017, NAR sent a letter to the Federal Housing Finance Agency (FHFA), as well as to Fannie Mae and Freddie Mac (collectively the GSEs), commenting on the recent decision by Fannie Mae and Freddie Mac to allow for data-based valuations rather than traditional in-person appraisals in certain purchase transactions. Given recent complaints of long appraisal wait times and a lack of appraisers in certain areas of the country, NAR is supportive of innovations in the appraisal field that would help alleviate some of these issues and help the real estate market function efficiently.

However, NAR does have some concerns with the appraisal waiver programs implemented by the GSEs. Given the recent housing crisis and its role in the Great Recession, NAR firmly believes that creating mechanisms to provide safety and soundness to the real estate market is necessary, and traditional in-person appraisals are a very important element of ensuring a home loan is supported by sufficient collateral. Entities using automated valuation methods must demonstrate that those methods will not put undue risk into the housing market. While NAR is pleases with the GSEs requirement of 80 percent loan to value and limitation on the types of properties that can be financed without a traditional appraisal, there are still questions on the full applicability of the program and borrower requirements. NAR asks FHFA and the GSEs to provide more information on their programs for better transparency and assurances to the public, as well make it clear to borrowers that the transaction did not include a traditional appraisal.

 NAR's Letter to the FHFA

Advertisement