18th July 2012

Builder identification and reporting requirements

posted in Appraiser News |

To comply with FNMA and FHA guidelines, all new construction orders must have at least one sale outside the builder’s control. This is best demonstrated by a resale within the subject’s development (listed as “resale/non-builder”) or a sale by a competing builder (listed as “builder name”) within the development or within a competing development. The sale should be documented on the grid in your appraisal. Please note that this is a binding requirement and may not be skipped.

The engagement letter states for all Builder products, the listed comparables in the appraisal must show at least one sale outside the control of the builder (i.e. from a different builder). Note: To identify Builder products, Builder will be included in the product name on the engagement letter.

Source: May 15, 2012 – Fannie Mae Single Family Selling Guide page 577

Note: To comply with UAD, enter the numeral zero (0) in the dollar amount field when the builders differ from the subject.

Please immediately begin displaying the builder name on the grid for all Builder orders.

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