Appraisal Flexibility During COVID-19

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Appraisal report exceptions are now in effect to help facilitate residential real estate transactions. The temporary rules protect appraisers and homeowners from the risks of COVID-19.

COVID-19 Appraisal Safety

Typically, a home loan transaction allows an appraisal waiver or requires a full interior / exterior appraisal. For the latter, an appraiser visits the property inspecting it inside and out. In order to stem the COVID-19 spread, Conventional loan appraisal rules temporarily eased in light of the virus.

During the COVID-19 outbreak 2 alternate appraisal reports for Conventional home loans now exist. Both reports may replace the standard full interior / exterior appraisal report. Neither reports require the appraiser inspect the home’s interior.

2 Appraisal Report Options During COVID-19

Conventional loans may use either a Desktop Appraisal or Drive By Appraisal when a Full Interior / Exterior Appraisal is not an option. In other words, if an appraiser or homeowner do not want to risk exposure to COVID-19 due to an interior home inspection the lender may one of the substitute reports below.

1. Desktop Appraisals

A Desktop Appraisal is allowed for purchases using Conventional financing. Desktop Appraisal reports include the same data full appraisal reports do. However, appraisers do not inspect the subject property nor do they view the exterior in person. Instead, appraisers use the resources below to determine property value:

  • Public Records
  • MLS data
  • Other 3rd Party Date

2. Exterior Appraisals

Exterior (or “Drive By”) Appraisals are allowed temporarily for both purchases & rate and term refinances using Conventional financing. Drive By appraisals contain the same information as full appraisal reports. However, on Drive By reports appraisers only visually inspect the subject property’s exterior. No physical interior inspection occurs. In addition, the resources below help appraisers determine property value:

  • Public Records
  • MLS data
  • Other 3rd Party Data
  • Observations Made During Drive By

Values From Reports May Vary

While the temporary alternate appraisal reports grant flexibility during Social Distancing, the home values on the reports may vary. Most notably, custom homes and homes with unique upgrades may not obtain the desired value as a result of appraiser’s not inspecting the home.

Consult with your Real Estate Agent for more. In some cases a full interior / exterior appraisal would better capture a home’s full value.

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