Monday, 15 August 2022 | The Latest Buzz for the Appraisal Industry

The Fannie Mae Requirement Impacting All Appraisers in 2022

In today’s Buzzcast, we dive into the new ANSI standards announced for appraisers. Today we have Joan Trice, Founder of Allterra Group, LLC., and Bryan Reynolds, Appraiser eLearning Partner. We’ll be getting the inside scoop while they discuss the new updates and their impacts on appraisers.

Fannie Mae is requiring appraisers to use ANSI standards starting April 1st. What does that mean for appraisers and how can they make sure they are following all the new guidelines correctly? These questions and much more will be answered as Joan and Bryan have their discussion on this subject.

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  1. FHA handbook 4000.1 II. D. 3. page 586 11/09/2021 revision states “use the same measurement techniques for the subject and comparable sales, and report building dimensions in a consistent manner.” The realtors in southern Oregon do not measure property they list for sale they use assessment data. The assessors in southern Oregon do not use ANSI they round to the nearest 1/2 foot. So, using ANSI in southern Oregon for an FHA assignment will cause the appraisal to be in violation of handbook 4000.1; furthermore, it makes no sense to measure for any assignment in a manner that is not consistent with data sources. Furthermore, ANSI states ceiling height below 7′ is not living area; however, there are many homes in southern Oregon that do not have any room with a ceiling height at or above 7′ so according to ANSI these homes do not have living area and this rule has just disenfranchised those homeowners. ANSI requires a level of perfection that can be unattainable in the field due to obstacles. This is the wrong way to go and will only cause problems and added liability to appraisers. Shame on all of you for promoting this “standard” without making certain all data sources will also be required to follow ANSI and update their records to ANSI. Ramming this overly perfection driven “standard” down the throats of appraisers without requiring realtors and assessors to adhere to the same is yet another assault against the appraisal industry and not as you claim for the betterment. This is something that should be done at a state level and not by the GSEs because the GSEs have no control over realtors and assessors. Once again Fannie and all you minions who do her bidding have struck a blow against appraisers.

    1. I agree with Bryan completely. Much of the data we use, is not to ANSI guidelines nad if it is we would have no way of knowing that it is. Many markets react to 7′ or lower ceilings in different ways. If it is typical for the market (much like captive bedrooms or baths, dirt or gravel basement floors, etc) then it is generally accepted in THAT market. If Fannie Mae was so great at what they do, we the tax payers would not have needed to bail them out. Let appraisers appraise, and require them to document and explain, but do not impose arbitrary restrictions like this with no foresight into the effect it can have on otherwise excellent properties.

      1. So, anything goes, as long as it’s more than a few homes in that market, Rich? And along those lines, buyers don’t care if they have barely high enough ceilings to walk under? If I’m six five, I’m not supposed to care about ceiling height because it’s that way in other homes around here? We should ignore the fact that the room the agent is calling a bedroom is a long flight of stairs from any bathroom? The occupant gets sick or has to get to a bath in a hurry? Too damn bad. Ain’t the house’s fault?

  2. From my recollection of residential architectural measuring standards, based on several hours of High School and College level Architecture courses I have attended, I do not believe Architects follow ANSI standards (unless standards have changed since the 1980’s). All of the floorplans I drew up (using a drafting pencil, not CAD) did not include the stairwell twice, as ANSI seems to indicate as being their standard. It doesn’t matter to me, because I won’t be accepting any orders from this point on for multi-level homes when an interior inspection is required. There’s just too much room for error. If I were to be called in front of a Judge to explain what measuring standards I have followed for nearly 38 years of Appraising, I will say “Architectural Standards”, not ANSI Standards. Thanks FannieMae.

    1. My further research indicates that the American Institute of Architects adopted ANSI Standards in 1996, 15 years after my formal education in Architecture. Therefore, stairwell inclusion twice in GLA is apparently acceptable. However, it must also be mentioned that there is no all-encompassing rule set in stone regarding how to handle GLA of stairwell area on upper floors, as ANSI is not the only standard. I will continue to include only horizontal walkable floor area in GLA, with any stairwell being included once within the floor level from which the stairs ascend, as that is the way I was taught during formal Architectural Drafting Courses prior to 1996. Additionally, I will be adding a comment to my General Addendum which explains why I do not include stairwell footage twice. As I mentioned in earlier post, I will not be accepting assignments in the future on multi-story homes. As some of the other Reply Posts have mentioned, there are several various entities which do not necessarily follow ANSI standards, or they otherwise calculate stairwell footage by a different method.

      1. The more I ponder this, I am seeing other issues of concern regarding GLA and stairwells. Example: Since ANSI includes the stairwell twice in GLA, whereas the stairwell is to be counted as GLA and included with the floor from which it descends, in addition to its inclusion on the first floor, does that mean that therefore only the floor area beneath the stairway (on the first floor) with ceiling height in excess of 7 feet is to be included on the first floor GLA? You see how confusing and ridiculous this can be? I guess we Appraisers are now required to analyze market reaction to functional obsolescence of the substandard ceiling height below the first-floor stairway, or we are to otherwise remove that GLA below 7 ft ceiling height located beneath the stairs. Additionally, if ANSI takes the stance of “How do you get to the upper floor without a stairwell?” as being the main reason to include it twice, why then does their own standard cite that only that portion of the stairwell which closes out the open “descending floor” area is to be included in GLA? There are many homes with stairwells that extend past the open descending area of the upper floor, so since that additional stairwell cannot be included in GLA, then the argument of “how do you get to the floor” would seem to be inconsistent with the apparent reason ANSI developed this standard. I can go on and on.

  3. I am glad they have finally adopted a policy. Eliminates all of the grey area; whether you agree are not with the standard is a different point. Bryan, FHA has not adopted this policy, so this is not relevant to FHA appraisals. Although, I wouldn’t be surprised of they do adopt it in the near future. While some markets may view areas qith less than 7ft. ceilings as “livable area” there is no doubt it is not the same thing as the standard 8ft ceiling, which btw is becoming less standard now-a-days with more and more buyers wanting 9ft. ceilings or greater. The ANSI standard does not ask appraisers to ignore this area – it just can’t be included in the GLA. IMO – it shouldn’t be included in the GLA and should be accounted for qith a separate line item.

  4. You’re right Paul. Couldn’t agree more. Under 7″, it’s a separate line item. As for you folks who don’t physically measure EACH and EVERY property for a full appraisal and rely on assessors or (GASP!!) realtors’ stated GLA in an MLS listing, all I can say is WOOOO BOOOOY! You’re actually using data you haven’t verified in a report that you put your name on AND SIGN???? Not sure how you use data you know is questionable and present it in a legal document that a lender bases their decisions on.
    I guess if it has worked for you in the past….
    Me, I’ll stick to measuring each and every assignment other than a “drive-by” (and no, I don’t do desktops)>

  5. ANSI standards are more trouble than they’re worth, as I understand them. As one commentator mentioned, no realtor, assessor, or other appraisers in Southern Oregon uses that standard. Nor do any of those professionals in either California, or Arizona, where I have appraised in the past. I have yet to find very many structures come out square when measured to the inch! I have always measured to the nearest quarter foot (3″) and have had no complaints. My father-in-law, an SRA who was my mentor in the appraisal profession, measured to the nearest half foot. He was, for some time, a staff appraiser for VA, so I would say he new what he was doing. I agree, this requirement is getting out of hand, and will probably put the nail in many of the coffins of appraisers looking for a reason to retire.

  6. I would like to meet a residential real estate appraiser who physically measures their comps and gets a survey by a surveyor they hired to get the legal description they will include in their appraisal of the subject property and the comps.

    1. Who said anything about measuring comps? We are supposed to measure the subject, but I guess if you don’t have the time or inclination, you can use other sources IF you state that other source data and why it’s used instead of your own physical measurement. As to surveys, if one is available, I use that. If not, I will use county data and state that that was the info source for the site size used. If that’s not readily obtainable, I’ll use Google Earth and (again) state where my information came from.
      And, yes, I am exclusively a residential appraiser.


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