B4-1.2-03, Hybrid Appraisals (09/04/2024)

A hybrid appraisal reported on the Uniform Residential Appraisal Report (Hybrid) (Form 1004 Hybrid) or Individual Condominium Unit Appraisal Report (Hybrid) (Form 1073 Hybrid) are permitted for certain transactions and must conform to B4-1.1-04, Unacceptable Appraisal PracticesB4-1.1-04, Unacceptable Appraisal Practices. The minimum scope of work for hybrid appraisals includes consideration by the appraiser of interior and exterior property data collection by a trained and vetted third party (such as a real estate agent, insurance inspector, appraiser, etc.). The appraiser relies on the data collected (and other sources if needed) to identify property characteristics including condition. The property data collection must comply with the Uniform Property Dataset and be delivered to the Fannie Mae Property Data API.

Property data collection and the appraisal report are separate assignments and may be performed by different people. If the appraiser does not perform the data collection, the lender must share the property data collection with the appraiser at the time of engagement. The appraiser will use the data along with other third-party sources to develop the appraisal. The effective date of the hybrid appraisal is the date that the appraiser arrives at their opinion of value.

Note: If the appraiser is engaged as a property data collector and at a later date engaged as an appraiser, this is still considered a hybrid appraisal.

The lender remains responsible for verifying the accuracy of the property description and the completeness of the data including the condition and quality ratings as determined by the appraiser. The lender is also responsible for ensuring the property meets the property eligibility requirements in this Selling Guide. Lastly, the lender remains responsible for any life-of-loan representations and warranties that may apply to the property or the appraisal.

Exhibits: Form 1004 Hybrid and Form 1073 Hybrid require the same exhibits as traditional appraisals with the inclusion of a floor plan conforming to the ANSI standard. See  B4-1.2-01, Appraisal Report Forms and ExhibitsB4-1.2-01, Appraisal Report Forms and Exhibits for additional information on exhibits and  B4-1.3-05, Improvements Section of the Appraisal ReportB4-1.3-05, Improvements Section of the Appraisal Report for additional information on the ANSI standard.

Entry of Appraisal Assignment Type: The appraiser must provide the Appraisal Assignment Type and supporting details (located in the Additional Comments section of the appraisal report) as shown in the following table.

Note: For the Subject Property Data Collection Date, the appraiser must enter the date that the property data collection was performed. For the Subject Property Data Workforce, the appraiser must enter the Workforce indicated in the property data that is one of the six Required Entry enumerations listed above.

A hybrid appraisal is only permitted when all of these preconditions are met in this sequence:

1. DU determines the loan is eligible for value acceptance + property data.

2. The lender obtains property data and submits it to the Fannie Mae Property Data API.

3. The property data confirms that the property type is residential and not on the Ineligible Transactions list below.

4. The loan loses eligibility in DU for value acceptance + property data due to a change in qualifying loan characteristics.

5. The lender provides the property data collection to an appraiser to perform a hybrid appraisal assignment.

The following transactions are not eligible for a hybrid appraisal:

• two- to four-unit properties;
• co-op units;
• manufactured homes;
• proposed construction;
• construction-to-permanent loans (single-close and two-close);
• HomeStyle Renovation and HomeStyle Energy loans;
• Texas (50)(a)(6) loans;
• community land trusts, or other properties with resale price restrictions, which include loan casefiles using the Affordable LTV feature;
• transactions where either the purchase price or estimated value provided to DU is $1,000,000 or more;
• transactions using gifts of equity;
• DU loan casefiles that receive an Ineligible recommendation; and
• manually underwritten loans.

When a hybrid appraisal is reported on Form 1004 Hybrid or Form 1073 Hybrid and submitted through the UCDP, the appraisal will be scored by Collateral Underwriter (CU). All eligible loans with a hybrid appraisal receiving a CU risk score of 2.5 or less are eligible for enforcement relief of certain representations and warranties related to the appraisal value of the subject property (see  A2-2-06, Representations and Warranties on Property ValueA2-2-06, Representations and Warranties on Property Value for complete requirements and additional information).