by usezloan | Aug 12, 2021 | Financial study
융자지식188- APPRAISAL WAIVER
APPRAISAL WAIVER
When DU or LPA response indicates the loan is eligible for an appraisal waiver (PIW or ACE/PIA) the
following requirements must be met. The eligibility must be retained on the final AUS response.
APPRAISAL WAIVER ELIGIBILITY
Eligibility for Use of an Appraisal Waiver with
Fannie Mae (PIW) and Appraisal Collateral Evaluation Freddie Mac (ACE/PIA)
Requirement Fannie Mae Freddie Mac
AUS Response Approve/Eligible Accept
Appraisal Type PIW PIA
Property Types 1 unit properties including condominiums
Occupancy Owner Occupied
Second Homes
Investment properties
Owner Occupied
Second Homes
Transaction Type Purchase
• Owner Occupied and Second
Homes up to 80% LTV/CLTV
Rate-and-Term Refinance
• Owner occupied and Second
Homes up to 90% LTV/CLTV
• Investment properties up to 75%
LTV/CLTV
Cash-Out Refinance
• Owner occupied up to 70%
LTV/CLTV
• Second Homes and Investments
properties up to 60% LTV/CLTV
Properties in High-Need Rural locations
as identified by FHFA
Purchase
• Owner Occupied and Second
Homes up to 80% LTV/CLTV
Rate-and-Term Refinance
• Owner occupied and Second
Homes up to 90% LTV/CLTV
Cash-Out Refinance
• Owner occupied up to 70%
LTV/CLTV
• Second Homes up to 60%
LTV/CLTV
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• See Rural High-Needs Appraisal
Waiver section for requirements.
APPRAISAL WAIVER RESTRICTIONS
See below grid indicating property characteristics that restrict the use of an appraisal waiver for Fannie
Mae and/or Freddie Mac. When a characteristic is marked as restricted a full appraisal is required.
Restrictions for Use of an Appraisal Waiver for Fannie Mae (PIW) and Freddie Mac (ACE/PIA)
Restriction Fannie Mae Freddie Mac
Properties located in New York
• All purchase transactions
• Refinances with a LTV > 80% requiring MI
X X
Construction or Construction-to-Permanent Transactions X X
Renovation mortgage products X X
2 to 4-unit properties X X
Texas 50(a)(6) loans X X
The purchase price or estimated value of the subject is equal to
or greater than $1,000,000 X
The purchase price or estimated value of the subject is greater
than $1,000,000 X
Leasehold properties X X
Properties with Resale Restrictions X X
Cooperative Units X X
Manufactured Homes (including accessory units) X X
Loans for which the mortgage insurance provider required an
appraisal X X
An Appraisal is warranted based on additional information
provided (e.g. sales contract, property inspection or disclosure,
etc.) to indicate property is:
• Located in a contaminated site or hazardous substance
exists affecting the property or neighborhood in which
the property is locates, or
• Contains adverse physical property conditions.
X X
Transactions using gift of equity X X
Rental income from the subject is being used to qualify X X
Non-arm’s length transaction X
Purchase of REO Property (identified in sales contract) X
Investment property X
Ineligible or Caution AUS response X X
An appraisal has already been obtained in connection with the
mortgage X X
The lender is required by law to obtain an appraisal
• This does not apply for loans closed in Flagstar’s name
as the lender
• Correspondents that close a transaction with an
appraisal waiver represent and warrant the use of the
appraisal alternative is compliant with the
correspondent’s state legal obligation
X X
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RURAL HIGH-NEEDS APPRAISAL WAIVER- FANNIE MAE
In selected rural high-needs areas, Fannie Mae may offer appraisal with additional requirements
through DU for certain transactions. This appraisal waiver may be combined with other loan products,
such as HomeReady.
Fannie Mae Rural High-Needs Appraisal Waiver Requirements
DU Response Approve/Eligible
Appraisal Type PIW
Property Types 1 unit properties (excluding manufactured homes)
Occupancy Owner Occupied only
Transaction Type Purchase only with LTV up to 97% and CLTV up to 105% with a Community
Second
Eligibility Property must be otherwise eligible for use of a PIW. See Appraisal Waiver
Restrictions for ineligible transactions.
These following requirements must be met in order to exercise the Rural High-Needs Appraisal Waiver:
• Obtain a home inspection to determine the property condition. Must use a professional inspector
that meets the state license and education requirements for those states that regulate
inspectors.
o Confirm that the inspector has liability insurance
o In states that do not have inspector licenses, inspectors that are professionally
accredited members in good standing of a nationally recognized property inspection
organization must be used. The national organization must require education, testing,
and adherence to a code of ethics and to standards of practice.
• Review the inspection report to verify the property condition.
o Represent and warrant that the property is safe, sound, and structurally secure and that
the property is not in C6 condition;
o Any issues that compromise safety, soundness, or structural integrity must be repaired
before loan delivery
• Obtain an affidavit signed by the borrower(s) confirming that they received a copy of the
property inspection report, read the report, and were notified of any lender-required repairs.
• Confirm that the purchase contract contains an inspection contingency that offers that
borrower(s) enough time to cancel the contract without penalty if they so choose, should the
inspection reveal an issue with the property
by usezloan | Aug 12, 2021 | Financial study
융자지식187- APPRAISALS
ADDRESS DETERMINATION
Use the standardized (USPS address) but compare it to the legal description on Schedule A on the title
commitment. If the legal description’s city/township is different, use the legal city/township, but maintain the
street address portion provided by USPS.
• The appraiser must provide the legal address on an addendum
• For multi-unit properties, it is acceptable to use the legal street address.
• The city indicated on the appraisal can be either standardized or legal.
For condominiums and Planned Unit Developments that have a unique address, i.e., street number is
different for each unit), the unit number does not need to be included on the closing documents (e.g. note,
mortgage, etc., if the unit number is not part of the appraisal or purchase agreement and is referenced in
the legal description. If the unit number is part of the appraisal or purchase agreement and is referenced in
the legal description, the unit number must then be included on the closing documents.
APPRAISALS
All loans submitted to Flagstar Bank require an interior and exterior inspection regardless of AUS
requirements unless an Appraisal Waiver is utilized. Appraisal waivers are not eligible in certain
circumstances, see the Appraisal Waiver section for additional information.
Fannie Mae and Freddie Mac will require the use of Uniform Appraisal Dataset (UAD) – compliant
appraisal report forms for the four supported UAD appraisal forms:
• Uniform Residential Appraisal Report (Fannie Mae form 1004)
• Individual Condominium Unit Appraisal Report (Fannie Mae form 1073)
• Exterior-Only Inspection Individual Condominium Unit Appraisal Report (Fannie Mae form 1075).
Flagstar Bank does not accept Form 1075 reports.
• Exterior-Only Inspection Residential Appraisal Report (Fannie Mae form 2055). Flagstar Bank does
not accept Form 2055 reports.
All appraisals are subject to Fannie Mae/Freddie Mac and USPAP guidelines.
Appraisals must be ordered through Loantrac Appraisal Management, refer to Doc #4903, or by an
Appraiser Independence (formerly HVCC) Compliant Correspondent. Refer to AIR Compliance
Questionnaire/Checklist, Doc. #3027 for application process details. For appraisals originally ordered by
another lender, refer to the Appraisal Portability section.
Any loan that has a unique or different characteristic other than the normal should not be considered for
maximum financing. You should have comparables with the same type of uniqueness or difference. For
example, log homes should have log home comparables, etc.
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Any physical deficiencies stated on the appraisal that affect the health or safety of the property’s occupants
must be corrected. If the appraised value is “subject to” by an appraiser, the appraiser must give a final “asis” value after the requested conditions are met and reviewed by the same appraiser. Note that while
Fannie Mae does permit an appraiser to add some certifications to appraisal report forms, Fannie Mae will
not purchase a mortgage for which the appraiser has added, modified, or deleted a Limiting Condition on
the appraisal report.
Properties in C5 and C6 condition are not eligible. The property must have a condition rating of C1, C2, C3,
or C4 and appraisal completed as is.
Properties with evidence of activities that are federally, state, or locally prohibited (e.g. marijuana growth,
processing, etc.) are ineligible. Property alterations cannot be made to achieve collateral eligibility.
Flagstar Bank reserves the right on any loan to order an AVM (Automated Valuation Model) and/or a
review appraisal.
All appraisal reports must include the following:
• Photographs of the subject property including:
o Exterior photos of the front and rear view of the subject and street scene photo
o Interior photos of the kitchen, all bathrooms and the main living area of the subject.
o Any additional photos, as needed, to show any physical deterioration, improvement,
amenities, conditions and external influences that materially impact the value or
marketability.
• Photographs of the front of each comparable sale
• Building Sketch
o If the floor plan is atypical or functionally obsolete, thus limiting the market appeal for the
property in comparison to competitive properties in the neighborhood, a floor plan sketch
that includes the interior walls.
• Location Map identifying subject and comparables used by the appraiser
APPRAISAL EXPIRATION AND UPDATES
Residential appraisal reports must be dated no more than 120 calendar days from the note date for
both existing and new construction. If the appraisal is greater than 120 calendar days, but no more than
12 months, and the loan has not closed, see below for requirements.
• For loans targeted to Fannie Mae, the appraiser must perform an update on form 1004D, which
includes:
o Inspection of the exterior of the property, and
o Review of the current market data to determine whether the property has declined in
value since the date of the original appraisal. If the appraiser indicates the property value
has declined, a new appraisal will be required
• For loans targeted to Freddie Mac, one of the following is required:
o An appraisal update reported on Form 442, Appraisal Update, and/or Completion
Report. If the appraiser indicates the property value has declined, a new appraisal will be
required, or
o A new appraisal based on an exterior-only inspection and reported on the appropriate
Freddie Mac form based on the property type. If the appraiser indicates the property
value has declined, a new appraisal will be required, or
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o A new appraisal based on an interior and exterior inspection and reported on the
appropriate Freddie Mac form based on the property type.
• For both Fannie Mae and Freddie Mac, if the original appraisal is more than 12 months, a full
new appraisal report will be required.
The appraiser who performed the original appraisal should perform the appraisal update. However,
another appraiser can perform the appraisal update.
APPRAISAL ADDENDUM REQUIREMENTS FOR INVESTMENT AND 2-4 UNIT PROPERTIES –
SUBJECT PROPERTY
In addition to the appropriate appraisal form, the following appraisal addendums are required for
investment and 2 to 4-units when rental income is used to qualify the borrower for the mortgage loan:
SUBJECT PROPERTY
Property
Type Occupancy Appraisal Form # Required
1-Unit Investment Fannie Mae form 1007/Freddie Mac form 1000
2-4 Unit Primary or
Investment Fannie Mae form 1025/Freddie Mac form 72 includes the Comparable Rent
Schedule
Report Requirements
Appraisers must give special attention to the valuation of the one-to-four family dwellings intended
for or currently used as, rental properties. For 2 to 4-unit properties, the appraiser must use the
Small Residential Income Property Appraisal report. Fannie Mae form 1025/Freddie Mac form
72(rev. 3/2005). The income approach would be given equal consideration with the market
approach in the appraiser’s final value reconciliation. The appraisal must include:
• The property’s legal description
• Layout sketches
• A location map
• Clear photos of property, street scene, and comparables used
On the single-family properties that will be rented, the appraiser must use the Single-Family
Comparable Rent Schedule (Fannie Mae Form 1007) as an attachment provided the borrowers do not
qualify with the full payment. The appraiser must develop an income approach to value that is
supported by rent comparable and must consider that information in the final reconciliation. The
comparables should be in close proximity to the subject in order to establish the existence of a viable
rental market in the neighborhood. For properties that are in established condominium or PUD projects
(those that have resale activity), the appraiser should use comparable sales from within the subdivision
or project as the subject property if there are any available. Resale activity from within the subdivision
or project should be the best indicator of value for properties in that subdivision or project. If the
appraiser users sales of comparable property that are located outside of the subject neighborhood, he
or she must include and explanation with the analysis.
COMPARABLES
The appraisal should contain a minimum of two conventional comparable sales, preferably three. Land
contract comparables are unacceptable. Generally, the appraiser should use comparable sales that
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have been closed within the 12 months preceding the effective date of the subject property appraisal.
More specifically, comparables should have closed within the average marketing time for the area as
indicated by the appraiser. However, the appraiser may use older comparable sales as additional
supporting data if he or she believes that it is appropriate. The appraiser must comment on the reasons
for using any comparable sales that are more than six month old and/or exceeds the marketing time for
the area. Each comparable should be similar to and located near the subject property. For properties
located in a declining market, the appraiser should provide comparables dated within three to six
months.
In selecting the comparables, the appraiser should keep in mind that re-sales from within the subject
neighborhood or project are preferable sales more distant from the subject property. Sales prices of
comparables should be in the same general range as the property. If the appraiser utilizes comparable
sales outside of the subject’s neighborhood when closer comparable sales appear to be available, the
appraiser must provide an explanation as to why he or she used the specific comparable sales in the
appraisal report. Because rural properties often have large lot sizes and rural neighborhoods can be
relatively undeveloped, there may be a shortage (or absence) of recent truly comparable sales in the
immediate vicinity of a subject property that is in a rural location. This means that the appraiser will
often need to select comparable sales that are located a considerable distance from the subject
property. The appraiser should include an explanation of why the particular comparables were selected.
The appraiser must fully disclose the 12-month listing history of the subject property, complete with the
dates and prices the subject was listed for, as well as the source of the listing information. If the
appraiser utilizes comparable sales outside of the subject’s neighborhood when closer comparable
sales appear to be available, Fannie Mae requires that the appraiser provide an explanation as to why
he or she used the specific comparable sales in the appraisal report. If the subject has not been listed,
the appraiser must list the data source(s) used to confirm that the subject has not been listed. “Public
records” is not an acceptable data source. The 36-month history must be provided for all comparables.
Sources of Comparable Market Data: It is important for the appraiser to ensure that the data he or she
is providing in the appraisal report is accurate. When the appraiser is provided with comparable sales
data by a party that has a financial interest in either the sale or financing of the subject property, the
appraiser is required to verify the data with a party that not have a financial interest in the subject
transaction. However, when appraising new construction, the appraiser may need to rely solely on the
builder of the property they are appraising to provide comparable sales data, as this data may not yet
be available through typical data sources such as public records or multiple listing services. In this
scenario, it is acceptable for the appraiser to verify the transaction of the comparable sale by viewing a
copy of the Closing Disclosure from the builder’s file.
The dollar value of the net adjustments of each comparable should not exceed 15% of the
comparables’ sale prices. The gross adjustment should not exceed 25%. The appraiser must comment
on the reason for any adjustments exceeding these limits.
REQUIREMENTS FOR NEW (OR RECENTLY CONVERTED) CONDOS, SUBDIVISIONS, OR PUDS
Fannie Mae
If the subject property is located in a new (or recently converted) condominium, subdivision, or
PUD, then it must be compared to other properties in the neighborhood as well as to properties
within the subject subdivision or project. This comparison should help demonstrate market
acceptance of new developments and the properties within them. The appraiser must use:
• One comparable sale from the subject subdivision or project,
• One comparable sale from outside the subject subdivision or project, and
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• The third comparable sale can be from inside or outside of the subject subdivision or project,
provided it is a good indicator of value for the subject property
Two of these sales must be verified from reliable data sources, other than the builder. Sales or
resales from within the subject subdivision or project are preferable to sales from outside the
subdivision, project provided the developer, or builder of the subject property is not involved in the
transactions.
To meet the requirement that the appraiser utilize one comparable sale from inside the subject
subdivision or project, the appraiser may need to rely solely on the builder of the property he or she
is appraising, as this data may not yet be available through typical data sources (for example, public
records, or multiple listing services). In this scenario, it is acceptable for the appraiser to verify the
transaction of the comparable sale by viewing a copy of the Closing Disclosure from the builder’s
file.
As a reminder, when providing builder sales from competing projects that are not presently
available through traditional data sources, the appraiser must verify the sale from the applicable
Closing Disclosure and indicate on the appraisal report that the Closing Disclosure was the
document utilized for verification. Additionally, the appraisal must include discussion and analysis of
sales concessions and upgrades for the subject property relative to concessions and upgrades for
each builder sale.
Two pending sales may be provided in lieu of one closed sale (as required above) in the subject
subdivision or project in the event closed sales are not yet available. When this flexibility is used,
the appraiser must also provide at least three closed comparable sales from outside the subject
subdivision or project.
Freddie Mac
To demonstrate the marketability and develop an opinion of market value for units in new
subdivisions, units in new PUDs or units in recently converted or New Condominium Projects, the
appraiser must comply with the following requirements:
• One comparable sale must be from inside the subject subdivision or project, when available.
Additionally:
o The comparable sale from inside the subject subdivision or project can be a sale by
the builder or developer of the subject property
o If there are no closed comparable sales from inside the subject subdivision or
project, contract sales may be used from inside the subject subdivision or project to
satisfy this requirement. However, the use of contract sales must be in addition to the
three actual closed sales obtained from outside the subject subdivision or project.
o In the event the subject subdivision or project is so new that a closed sale or a
contract sale is not available, comparable sales from outside the subject subdivision
or project may be used. However, the appraiser must comment on the marketability
of the new subdivision or project and justify and support the use of the comparable
sales from outside the new subdivision or project.
REQUIREMENTS FOR ESTABLISHED CONDOS, SUBDIVISIONS, OR PUDS
If the subject property is located in an established condominium, subdivision, or PUD, the appraiser
should use comparable sales from within the subject subdivision or project.
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NEIGHBORHOOD
The appraiser must report on the primary indicators of market condition for properties in the subject
neighborhood by noting the trends of property values (“increasing,” “stable,” or “declining”), the supply
of properties in the subject neighborhood (“shortage,” “in balance,” or “over supply”), and the marketing
time for properties (“under 3 months,” “3 to 6 months,” or “more than 6 months”) as of the effective date
of the appraisal.
The appraiser’s analysis of the property must take into consideration all factors that affect value. This is
particularly important in markets where value is fluctuating. The most recent and similar sales available
should be used in these markets.
The appraiser must perform a neighborhood analysis in order to identify the area that is subject to the
same influences as the property being appraised (based on the actions of typical buyers in the market
area). The results of a neighborhood analysis enable the appraiser not only to identify the factors that
influence the value of properties in the market area, but also to define the area from which to select the
market data needed to perform a sales comparison analysis. As a reminder, although it is preferable for
the appraiser to provide comparables from the subject’s neighborhood, Fannie Mae does allow for the
use of comparable sales that are located in competing neighborhoods, as these may simply be the best
comparables available and the most appropriate for the appraiser’s analysis. If this situation arises, the
appraiser must not expand the neighborhood boundaries just to encompass the comparables selected.
The appraiser must indicate the comparables are from a competing neighborhood and address any
difference that exist.
The appraiser must fully disclose the 36-month listing history of the subject property, complete with the
dates and prices the subject was listed for, as well as the source of the listing information. If the subject
has not been listed, the appraiser must list the data source(s) used to confirm that the subject has not
been listed. Public records is not an acceptable data source. The appraiser must provide a copy of the
MLS listing for all listed properties. The 12-month history must be provided for all comparables.
COMMUNITY-OWNED OR PRIVATELY MAINTAINED STREETS
Fannie Mae
If the property is located on a community-owned or privately-owned and maintained street, an
adequate legally enforceable agreement or covenant for maintenance of the street is required. The
agreement or covenant should include the following provisions and be recorded in the land records
of the appropriate jurisdiction:
• Responsibility for payment of repairs, including each party’s representative share
• Default remedies in the event a party to the agreement or covenant fails to comply with his
or her obligations
• The effective term of the agreement or covenant, which in most cases should be perpetual
and binding on any future owners.
If the property is located within a state that has statutory provisions that define the responsibilities of
property owners for the maintenance and repair of a private street, no separate agreement, or
covenant is required.
Freddie Mac
If the property is located on a community-owned or privately-owned and maintained street, a legally
enforceable agreement or covenant for maintenance of the street is not required to be recorded if
all the following is met:
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• The subject property must have legally appropriate ingress and egress that is recorded
• The streets serving the subject property must be maintained in a manner that generally
meets community standards.
• The comparable sales should have street maintenance similar to the subject property. When
differences exist between the ownership or maintenance of the subject property’s streets
and the comparable sale’s streets, adjustments, or lack of adjustments made to the
comparable sales for the differences must be explained in the comments area or on an
attached addendum. In addition, the appraisal must evaluate the effect these differences
have on the subject property’s value or marketability.
SHARED DRIVEWAYS
When joint driveway is constructed across two party lines, is wholly on the subject property or wholly on
the adjoining property, an easement must be recorded allowing for all present and future owners the
use of the driveway without any restriction other than the restriction by reason of mutual easement
owners’ rights in common and duties for joint maintenance.
DISCLOSURE OF INFORMATION TO APPRAISERS
The appraiser must state the effect of value of any non-realty items included in a sale, such as closing
costs paid by the seller or any subordination agreements with the property.
Fannie Mae
If the contract is amended after the effective date of the appraisal in a way that does not affect the
description of the property, then it is not required to provide the amended contract to the appraiser
nor obtain a revised appraisal. Some examples of amendments that do not require the lender to
provide the amended contract nor obtain revisions to the already-completed appraisal report
include:
• Sale price
• Transaction terms
• Financing concessions
• Seller-paid closing costs
• Names or initials
• Closing date
• Correction of minor clerical errors such as misspellings
Disclosure of changes to financing information, such as loan fees and charges, and subordinate
financing provided by interested parties only must be provided to the appraiser for purchase
transactions.
Freddie Mac
The following information on the subject property, as applicable, must be provided to the appraiser
in conjunction with all appraisal requests:
• The complete sales contract (A sales contract on a new home should state the base price of
the house and itemize each option.)
• All financing terms, financing and sales concessions granted by anyone associated with
transaction, and any gifts, buydowns and down payment assistance provided by anyone on
behalf of the Borrowers, whether for purchase or refinance transactions
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• Income and expense statements, property leases and a list of non-realty items that are
included in the transaction, and
• Any other information that the Seller knows that may affect the value or marketability of the
property. This information includes, but is not limited to, an affiliation between the property
seller and purchaser, proposed changes to the use of the property, and the presence of any
Contaminated Site or Hazardous Substance affecting the property or the neighborhood in
which the property is located.
o It is not required to provide the appraiser with an updated sales contract unless the
updated terms impact the physical description or condition of the property. Changes
to the sales contract that are not required to be provided to the appraiser include, but
are not limited to:
Changes to the transaction terms such as sales price, financing or sale
concessions, and
Date revisions, corrections to typographical errors, etc.
If the updates will impact the physical description or condition of the property, the appraisal must be
updated.
EFFECTIVE AGE
When adjustments are made to the appraisal for the effective age, the appraiser must provide an
explanation for the adjustments and the condition of the property.
ZONING
Zoning of the property must constitute a legally permissible use of the land. The property must
represent the highest and best use of the land. Non-conforming property must have the city zoning
authority letter or an appraiser’s addendum stating that it is a legal non-conforming use. Comparable
must have the same zoning influence.
Properties that are subject to coastal tideland, wetlands or setback laws and/or regulations that prevent
the rebuilding of the property improvements if they are damaged or destroyed are ineligible.
WELL AND SEPTIC
We will not require a well and septic test unless required by the appraiser, there is evidence to suggest
failure of the system, the purchase agreement requires an inspection, or appraiser notes property is in
the vicinity of environmental hazards with potential for contamination based on proximity.
SITE/VIEW ADJUSTMENTS
The appraisal must include the actual size of the site and not a hypothetical portion of the site. For
example, the appraiser may not appraise only 5 acres of an un-subdivided 40-acre parcel. The
appraised value must reflect the entire 40-acre parcel. For properties with larger than normal lots or
considerable acreage that do not have comparables with the same type of lots or acreage, any
excessive plus adjustments will be subtracted from the final value of the comparable and the new
adjusted value will be used for loan-to-value calculations.
We will only accept an electronically submitted PDF copy of the appraisal report. The document must
have an electronically reproduced signature of the appraiser and the report must comply with the
applicable requirements outlined in this section.
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The appraiser’s analysis of a property must take into consideration all factors that have an effect on
value. To assure that this is done in the development of the sales comparison approach to value, we
require the appraiser to analyze closed sales, contract sales, as well as current and expired listings of
properties that are the most comparable to the subject property (although we require the appraiser to
report only the comparable sales in the appraisal report). The appraiser should always include in the
appraiser report or in an addendum any other information that Flagstar Bank will need to make a
prudent underwriting decision. In arriving at the sales comparison approach to value, the appraiser
must make appropriate adjustments. “Time” adjustments are acceptable, as long as they reflect the
time elapsed between the contract date for the comparable sales and the effective date of the
appraisal. These adjustments must be representative of the subject market and supported by market
data that is reported in the appraisal report.
SOLAR PANELS
Ownership and financing/leasing structure of the subject property solar panels must be determined by
evaluating the credit report, copy of related solar panel documentation and title commitment to address
if the related debt is reflected in the land records. If insufficient documentation is available and the
ownership status of the panels is unclear, no value for the panels may be attributed to the property
value on the appraisal unless the lender obtains a UCC “personal property” search to confirm the solar
panels are not claimed as collateral by any non-mortgage lender.
Properties with solar panels financed with a PACE loan that will not subordinate are not eligible if the
PACE loan is not paid in full prior to or at closing.
UCC Filing Classifications
A UCC financing statement is a legal form filed to give notice that a creditor has or may have
interest in personal property.
Fixture Filing
UCC-1 financing statement authorized and made in accordance with the UCC
adopted in the state in which the related real property is located. It covers property
that is, or will be, affixed to improvements to such real property. It contains both a
description of the collateral that is, or is to be, affixed to that such property, and a
description of such real property. It is filed in the same office that mortgages are
recorded under the law of the state in which the real property is located. Filing in the
land records provides notice to third parties, including title insurance companies, of
the existence and perfection of a security interest in the fixture. If properly filed, the
security interest in the described fixture has priority over the lien of a subsequently
recorded mortgage
Precautionary
Filing
A precautionary UCC filing is one that lessors often file to put third parties on notice
of their claimed ownership interest in the property described in it. When the only
property described in the UCC filing as collateral is the solar equipment covered by
the lease or power purchase agreement, and not the home or underlying land, such
a precautionary UCC filing is acceptable
Borrower Owned and Financed Solar Panels
If the borrower is, or will be, the owner of the solar panels (meaning the panels were a cash
purchase, were included in the home purchase price, were otherwise financed and repaid in full, or
are secured by the existing first mortgage), standard requirements apply (for example, appraisal,
insurance, and title).
The following must be applied based on the structure of the solar panels when financed and
collateralized:
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Financing Term
requirements
Review sufficient documentation (credit, title, appraisal and/or UCC financing
statement, related promissory note and related security agreement) that reflects
terms of secured loan to determine if the solar panels are recorded as part of the
real property as a UCC fixture filing or considered personal property as collateral
is not recorded on title.
Debt Inclusion Debt must be included in the DTI calculation
Value
• When there is a fixture filing in property records- Appraiser may consider solar
panels in value unless the panels can be repossessed for default of financing
terms
• Financing does not appear on title- Appraiser may not provide a contributory
value because the panels are collateral for another debt
Loan to Value
When there is a UCC fixture filing recorded in the real estate record the debt must
be included in the CLTV ratio
• If the fixture filings is in the land records as a priority senior to the mortgage, it
must be subordinated
When the solar panels are collateral for separate (non-mortgage) debt but do not
appear on the title report, do not include in the debt in the CLTV as financing
treats the panels as personal property.
Property Freddie Mac only- must maintain access to an alternate source of electric power
that meets the community standards
Solar Panels Leased or Owned by a Third-Party
If the solar panels are leased from or owned by a third party under a power purchase agreement or
other similar lease arrangement, the following requirements apply
Lease or purchase
agreement
requirements
Copy of lease or power purchase agreement which must indicate all of the following:
• Any damage that occurs as a result of installation, malfunction, manufacturing
defect, or the removal of the solar panels is the responsibility of the owner of the
equipment and the owner must be obligated to repair the damage and return the
improvements to their original or prior condition (for example, sound and
watertight conditions that are architecturally consistent with the home); and
• The owner of the solar panels agrees not to be named loss payee (or named
insured) on the property owner’s insurance policy covering the residential
structure on which the panels are attached. As an alternative to this requirement,
the lender may verify that the owner of the solar panels is not a named loss
payee (or named insured) on the property owner’s property insurance policy;
and
• In the event of foreclosure, the lender or assignee has the discretion to
o Terminate the lease/agreement and require the third-party owner to
remove the equipment;
o Become, without payment of any transfer or similar fee, the beneficiary
of the borrower’s lease/agreement with the third party; or
o Enter into a new lease/agreement with the third party under terms no
less favorable that the prior owner.
Debt Inclusion
The monthly lease must be included in the DTI unless the lease is structured to:
• Provide delivery of a specific amount of energy at a fixed payment during a given
period, and
• Have a production guarantee that compensates the borrower on a prorated
basis in the event the solar panels fail to meet the energy output required for in
the lease for that period.
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• Payments under power purchase agreements where the payment is calculated
solely based on the energy produced and used may be excluded from the DTI
ratio.
Value Cannot be included in the appraised value of the property nor considered in the
determination for the LTV even if a “precautionary filing” UCC is recorded
Loan to Value Do not include in the CLTV as financing treats the panels as personal property
Property Property must maintain access to an alternate source of electric power that meets
the community standards
APPRAISER ELIGIBILITY
All appraisals must be completed by a Flagstar Bank eligible appraiser.
• Refer to Appraiser Independence Compliance Guidelines, Doc #4906.
• If the first appraiser on the report is not deemed eligible, we will accept the signature of a
Flagstar Bank eligible supervisory appraiser, provided that appraiser did physically inspect the
interior and exterior of the subject property and indicates so in the appropriate box.
• If an appraisal form is completed by an unlicensed or trainee (or similar classification) appraiser,
a supervisory appraiser must sign the appraisal form. A supervisory appraiser is not required to
inspect the subject property or comparable sales unless required by state law.
• Flagstar Bank will not accept an appraisal provided by the buyer, seller, builder, developer,
realtor, borrower, or anyone else with an interest (financial or otherwise) in the loan transaction.
by usezloan | Aug 12, 2021 | Financial study
융자지식186- ACCESSORY DWELLING UNITS
ACCESSORY DWELLING UNITS
An accessory unit is defined as an additional living space that must provide for living, sleeping, cooking and
contain bathroom facilities which may be added to or detached from the primary one-unit dwelling on the
same parcel. Examples include a living area over a garage, basement unit, or guest house.
If the property contains an accessory unit, the property is eligible under the following conditions:
• The primary dwelling property is a one-unit;
• The property contains only one accessory unit, multiple accessory units are not permitted;
• The appraiser provides a description of the accessory unit and analyze any effect it has on the
value or marketability of the subject property;
• The appraisal report demonstrates that the improvements are typical for the market through an
analysis of at least one comparable property with the same use;
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o For Freddie Mac only- If a comparable sale with an accessory unit is not available, for
properties with legal land use and zoning, the appraiser may use a neighborhood
comparable without an accessory unit as long as the appraiser can justify and support such
use within the appraisal report
• The borrower qualifies for the mortgage without considering any rental income from the accessory
unit.
The following requirements should be met to define an additional living space as an acceptable accessory
unit:
• Be subordinate in size to the primary dwelling
• The kitchen, at minimum, must contain cabinets, a countertop, sink with running water, and a stove
or stove hookup (hotplates, microwaves, or toaster ovens are not acceptable substitutes)
o Note that a second kitchen does not by itself constitute an ADU. Other features of living,
sleeping and bathing area must be present.
o Likewise, the removal of a stove does not change the ADU classification. The presence of a
stove hookup is sufficient to classify as an ADU.
• The unit must have an entrance that does not require access through the primary dwelling though it
may include an access to the primary residence. However, it is not considered an ADU if it can only
be accessed through the primary dwelling or the area is open to the primary dwelling with no
expectation of privacy.
Considerations that may require the property to be appraised (Form 1025/72) and treated as multi-unit
properties include, but not limited to:
• Separately metered utilities
• Unique postal address
• Rent collection
• Size of the accessory-unit relative to the main structure
• Multi-unit zoning
ACCESSORY UNITS THAT DO NOT COMPLY WITH ZONING REQUIREMENTS
If it is determined that the property contains an accessory dwelling unit that does not comply with
zoning, the property is eligible under the following additional conditions:
• The lender confirms that the existence will not jeopardize any future property insurance claim
that might need to be filed for the property.
• The property is appraised based upon its current use.
• The appraisal must report that the improvements represent a use that does not comply with
zoning.
• The use conforms to the subject neighborhood and to the market. The appraisal report must
demonstrate that the improvements are typical for the market through an analysis of at least two
comparable properties that have the same non-compliant zoning use.
MANUFACTURED HOME AS AN ACCEPTABLE ACCESSORY UNIT
A manufactured home may be considered an acceptable accessory unit. In addition to the standard
requirement of an accessory unit, as listed above, the below requirements must be met:
• Primary residence must be a site-built property. It is not acceptable to have two manufactured
homes
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• Both single and multi-width manufactured homes are acceptable. Freddie Mac requires the unit
be at least 400 square feet
• The accessory unit must be legally classified as real property
• Land must be held in fee simple interest by the borrower
• The manufactured home must have been built in compliance with the Federal Manufactured
Home Construction and Safety Standards (established June 16,1976 as amended and in force
at the time the home was manufactured)
• The property is attached to a permanent foundation system in accordance with the
manufacturer’s requirements for anchoring, support, stability and maintenance
• The foundation system must be appropriate for the soil conditions for the site and meet local
and state codes
• It is encumbered by the mortgage with the primary dwelling and
• Additional requirements that appear in HUD regulations in 24 C.F.R. Part 3280 must be met
• Manufactured home accessory unit must be recorded on title as real property prior to closing or
at time of purchase.
• An appraisal is required to verify compliance with all manufactured home standards, regardless
of DU/LPA response offerings for an appraisal waiver
• The addition of or improvements to a manufactured home accessory unit are not eligible under
the Homestyle Renovation product.
No exceptions will be made to the above requirements
Appraisal Requirements for Manufactured Home Accessory Units
Compliance with these standards will be evidenced by photos of either the HUD Plate of HUD
Certification Label (or both) in the appraisal. If the original or alternative documentation cannot be
obtained for either the Data Plate/Compliance Certificate or HUD Certification Label, the loan is not
eligible.
The appraisal report for a one-unit property with a Manufactured Home accessory unit must include
the following:
• Demonstrate the unit is acceptably classified as an accessory unit
• Confirmation that the HUD Data Plate/Compliance Certificate is attached to the dwelling. If
not attached, the appraiser must provide the data source(s) for the HUD Data
Plate/Compliance Certificate information reported.
• Freddie Mac- Confirmation that the Wind, Roof Load and Thermal Zones meet the minimum
HUD requirements for the location of the subject property. If the unit does not meet these
requirements, the appraiser must address.
• Confirmation that the HUD Certification Label is attached to the exterior of each section of
the dwelling. If not attached, the appraiser must provide the data source(s) for the HUD
Certification Label information reported.
• Manufacturer’s Serial #(s)/VIN #(s)
• HUD Certification Label #(s)
• Manufacturer’s Name
• Trade/Model
• Date of Manufacture
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• Describe any additions or modifications made to the Manufactured Home (decks, rooms,
remodeling, etc.)
ADDITIONS WITHOUT PERMITS – FANNIE MAE
If the appraiser identifies an addition that does not have the required permit, the appraiser must comment
on the quality and appearance of the work and its impact, if any, on the market value of the subject
property.
ADDRESS DETERMINATION
Use the standardized (USPS address) but compare it to the legal description on Schedule A on the title
commitment. If the legal description’s city/township is different, use the legal city/township, but maintain the
street address portion provided by USPS.
• The appraiser must provide the legal address on an addendum
• For multi-unit properties, it is acceptable to use the legal street address.
• The city indicated on the appraisal can be either standardized or legal.
For condominiums and Planned Unit Developments that have a unique address, i.e., street number is
different for each unit), the unit number does not need to be included on the closing documents (e.g. note,
mortgage, etc., if the unit number is not part of the appraisal or purchase agreement and is referenced in
the legal description. If the unit number is part of the appraisal or purchase agreement and is referenced in
the legal description, the unit number must then be included on the closing documents.
by usezloan | Aug 12, 2021 | Financial study
융자지식185- VERBAL VOE REQUIREMENTS FOR HOURLY, SALARY, AND COMMISSION INCOME
VERBAL VOE REQUIREMENTS FOR HOURLY, SALARY, AND COMMISSION INCOME
• The broker/correspondent must independently obtain a phone number, and if possible, an address
for the borrower’s employee. This can be accomplished by using a telephone book, the internet or
directory assistance, or by contacting the applicable licensing bureau.
• The broker/correspondent must contact the employer, verbally or in writing, and confirm the
borrower’s current employment status within 10 days prior to the closing date. Alternatively, the
VVOE may be obtained after closing up to the time of funding/purchase of the loan. If the VVOE
cannot be obtained prior to funding/purchase, the loan is ineligible for delivery to Flagstar Bank.
• If the contact is made verbally, the conversation must be documented. It should include the name
and title of the person who confirmed the employment, the date of the call, and the source of the
phone number. The written documentation should also include the name and title of the person who
performed the verification for the broker/correspondent.
If a borrower is in the military, a Military Leave and Earnings Statement (LES) is acceptable in lieu of a
verbal VOE when dated within 30 days for Fannie Mae and 120 days for Freddie Mac of the Note date.
Because third party vendor databases are typically updated monthly, the verification must evidence that the
information in the vendor’s database was not more than 35 days old as of the note date.
VERBAL VERIFICATION OF EMPLOYMENT FOR SELF-EMPLOYED
The existence of the borrower’s business must be verified from a third party source. Acceptable third party
sources include the following:
• CPA, regulatory agency, or the applicable licensing bureau, if possible, or
• By verifying a phone listing and address for the borrower’s business using the internet or directory
assistance.
• The existence of the business must be documented within 120 days prior to the note date.
Alternatively, the VVOE may be obtained after closing up to the time of funding/purchase of the
loan. If the VVOE cannot be obtained prior to funding/purchase, the loan is ineligible for delivery to
Flagstar Bank.
by usezloan | Aug 12, 2021 | Financial study
융자지식184- VICTIMS OF TAXPAYER IDENTIFICATION THEFT
VICTIMS OF TAXPAYER IDENTIFICATION THEFT
When a borrower(s) is a victim of taxpayer identification theft, the following conditions must be met in order
to validate the borrower(s) income:
• Proof of identification theft as evidenced by one of the following:
o Proof of identification theft was reported to and received by the IRS (IRS form 14039)
o Copy of notification from the IRS alerting the taxpayer to possible identification theft
• Additionally, provide each of the following secondary documents (as applicable) to validate the
reported income on the tax returns in question:
o W-2 or 1099 transcripts which match the W-2 or 1099 income shown on the 1040s
o 1099 mortgage interest should match the reported interest on Schedule A or Schedule E
o 1099-G unemployment should match reported unemployment
o 1099-DIV and 1099-INT should match reported dividend and interest
o Validation of prior tax year(s) income (income for current year must be in line with prior
year(s)
The IRS has announced that criminals used taxpayer-specific data acquired from non-IRS sources to gain
unauthorized access to information on approximately 100,000 tax accounts through the IRS “Get
Transcript” application. Due to this breach, Flagstar Bank is unable to obtain the full tax transcripts for
taxpayers that may have been impacted. The Reject Code 10 is being used by the IRS “Income Verification
Express Service” (IVES) application when there is possible identity theft on the taxpayer’s account. In
cases where the IRS will not provide the transcripts to the vendor, the following documentation will be
acceptable in lieu of the tax transcripts.
TAX RETURNS ARE REQUIRED TO DOCUMENT INCOME
• Tax Transcripts indicating, due to limitations, the IRS cannot process the request, taxpayer will
receive a mailed notice. If any questions, call the IRS Customer Service at 800-829-1040; Note:
A “no record found” or “data mismatch” is not acceptable; and
• Copy of the signed tax returns (follow AUS for the number of years to obtain); and
• Bank statement or copy of check to evidence that the tax payment made or refund received for
each tax year matches the amount on the 1040; and
• Signed 4506-C for each required tax year.
W2 AND/OR 1099’S ARE REQUIRED TO DOCUMENT INCOME:
• Tax Transcripts indicating, due to limitations, the IRS cannot process the request, taxpayer will
receive a mailed notice. If any questions, call the IRS Customer Service at 800-829-1040; Note:
A “no record found” or “data mismatch” is not acceptable; and
• Copy of all W2’s (follow AUS for the number of years to obtain); and one of the following
o IRS Provided Transcripts mailed to the borrower and uploaded to Paperless File
Manager, or
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o Year End Paystub for each required with Year-to-Date earnings in line with W2’s, or
o Fully Executed Verification of Employment completed by employer with Year End
Figures in line with W2(s).
by usezloan | Aug 12, 2021 | Financial study
융자지식183- MOST RECENT YEAR TAX RETURN REQUIREMENTS
MOST RECENT YEAR TAX RETURN REQUIREMENTS
When tax returns are required to document income, the most recent year’s tax return is required. The most
recent tax return is defined as the last return scheduled to have been filed. For example:
If today’s date is… Then the Most recent Year’s Tax Return would be…
February 15, 2021 2019
April 15, 2021 2020
December 15, 2021 2020
FANNIE MAE
The following table describes which tax-related documentation to obtain depending on the application
date and disbursement date of the mortgage loan.
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Application Date Disbursement Date Documentation Required
October 15, [current year
minus 1] to April 14, current
year
October 15 [current year minus 1] to
April 14, current year
The most recent year’s tax return is
required. The use of a Tax Extension
(IRS Form 4868) is not permitted.
April 14, current year to June 30,
current year
If the borrower has not filed his or her
return with the IRS for the previous
year the borrower must provide the tax
returns for the prior two years (2017
and 2018). Tax Transcripts for 2019 to
show – “No Record on file”
Completed and signed – 4506–C for
tax years provided by the borrower.
July 1, current year to October 14,
current year
• The most recent year’s tax return,
OR all of the following:
• A copy of IRS Form 4868
(Application for Automatic
Extension of Time to File U.S.
Individual Income Tax Return) filed
with the IRS,
• The underwriter must review the
total tax liability reported on IRS
Form 4868 and compare it with the
borrower’s tax liability from the
previous two years as a measure
of income source stability and
continuance. An estimated tax
liability that is inconsistent with
previous years may make it
necessary for the lender to require
the current returns in order to
proceed.
• Tax Transcripts confirming “No
Transcripts Available” for the
applicable tax year, and
• Returns for the prior two years
April 15, current year to
October 14, current year
April 15, current year to December 31,
current year
January 1, [current year plus 1] to April
14, [current year plus 1]
The most recent year’s tax return is
required. The use of a Tax Extension
(IRS Form 4868) is not permitted.
FREDDIE MAC
The following table describes which tax-related documentation to obtain, for Freddie Mac (LPA) on the
application date and disbursement date of the mortgage loan.
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Application Date Note Date Documentation Required
Prior to April 15 of the
current year
Before May 31 of the current
year
The most recent year’s tax return is required. The
use of a Tax Extension (IRS Form 4868) is not
permitted.
On or After April 15 of
current year
Prior to May 31 of the current
year
• The most recent year’s tax return
OR all of the following:
• A copy of IRS Form 4868 (Application for
Automatic Extension of Time to File U.S.
Individual Income Tax Return) filed with the
IRS,
• Review of self-employed income stability (see
below),
• IRS Form 4506–C transcripts confirming “No
Transcripts Available” for the applicable tax
year, and
• Returns for the last one or two years, as
required
All On or After May 31 through
October 14 of the current year
All On or After October 15 of the
current year*
The most recent year’s tax return is required. The
use of a Tax Extension (IRS Form 4868) is not
permitted.
*Flagstar will require the most recent tax returns (e.g. 2020) for Freddie Mac (LPA) loans with a Note date on or
after October 15th.
Self-Employed Stability When Tax Returns Are Older- Freddie Mac
If the Borrower’s federal individual and/or business income tax returns for the most recent calendar
year are not available (e.g., Borrower and/or Borrower’s business filed an IRS extension or tax
returns are not yet filed with the IRS), additional documentation must be provided to document
income stability.
Examples of factors and documentation to consider when using older tax returns to determine
continued income stability include, but are not limited to, the following:
• Business review and analysis of current business activity through a review of the most
recent financial statement(s) that cover the period since the last tax return filing(s)
• Business review and analysis of current business activity through a review of at least the
most recent three months of business bank statements
• Signed IRS Form 941, Employer’s Quarterly Federal Tax Return, for the prior calendar year
and current calendar year quarter(s) that supports wages and other compensation
documented on the most recent business tax return
• Review of tax liability reported with IRS tax filing extension(s) (e.g., IRS Form 4868, IRS
Form 7004) to determine consistency with tax liability reported on prior year(s) tax return(s)
• Review of W-2s, 1099s and/or K-1s from the most recent calendar year, if available
If the continued stability of the income cannot be determined, then the Borrower’s federal individual
and/or business income tax returns from the most recent calendar year may need to be obtained to
make the determination.
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EXCEPTION FOR FISCAL BUSINESS RETURNS
When business tax returns are required, if the borrower’s business uses a fiscal year (a year ending on
the last day of any month except December), the lender may adjust the dates in the above tables to
determine what year(s) of business tax returns are required in relation to the application
date/disbursement date of the new mortgage loan.
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