Fannie Mae’s Standardized Property Measuring Guidelines

(effective April 1, 2022)

We have started receiving calls and emails regarding Fannie Mae’s Standardized Measuring Guidelines wherein appraisers are “encouraged to begin using the ANSI® Z765-2021 Standard as soon as possible; however, it will be required for appraisals with effective dates of April 1, 2022 or later” on loans sold to Fannie Mae (https://singlefamily.fanniemae.com/media/30266/display).

Fannie Mae’s Selling Guide Announcement (SEL-2021-11) – dated Dec.15, 2021, state that:

Guidelines for measuring gross living area

We revised our policy for measuring, calculating, and reporting gross living area and non-gross living areas (basement, additional structures, etc.) by adopting a standard established by the American National Standards Institute® (ANSI® Z765-2021). This change will drive adoption of the standard across the valuation industry and establish a consistent, repeatable process. Appraisals requiring interior and exterior inspections must follow this standard; appraisals of this type performed without using this standard will not be acceptable.

Effective: Lenders may begin accepting appraisals using this standard immediately, but compliance is required for all applicable appraisals with an effective date on or after Apr. 1, 2022.

(https://singlefamily.fanniemae.com/media/30296/display)

We urge all appraisers to familiarize themselves with the requirements set forth in detail in the guidelines (https://singlefamily.fanniemae.com/media/30266/display). You should also consider taking an education course if you believe that would be helpful.

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Square footage errors are one of the top reasons why claims are made against residential appraisers; implementing a requirement that ANSI guidelines must be followed, and mandating how floor plans must be drafted, will not eliminate these claims. Most square footage claims arise from simple errors, such as math errors, or misreading notes (e.g., thinking their on-site note showed the wall was 8 feet long but it was really 6 feet long). We have had numerous claims where the appraiser understated square footage because they missed a room.

Computing the gross living area truly is an important part of the appraisal assignment and care needs to be taken when completing this portion of the report. When it comes to measuring, take your time and be careful. Check your math. Consider bringing someone with you to assist with measuring if it appears the home has a unique floorplan, multiple levels or detached structures. Don't rely upon measurements provided by others. Someone might try to hand you measurements or floor plans to "save you time"; there is no way of knowing if that information is accurate. You need to do the work yourself. You can't even rely upon your own prior measurements if you previously appraised the property, you really should measure it again just to make sure everything is accurate and in accordance with the newest guidelines and standards.

Potential stumbling blocks – consider discussing the points below with a USPAP / Fannie Mae / ANSI expert if you have any questions or concerns incorporating these guidelines into your report:

  • Be mindful that you might not know what method an MLS listing or assessor used to calculate the GLA of comparable sales that you are using in your report. Research, geographical competency, date of closing, etc. might determine if these sources should be adjusted. Remember to disclose your research and discuss your decision whether to adjust (or not) in your appraisal.
  • Exceptions to adhering to the ANSI standard. The appraiser must explain why compliance is not possible.

The ANSI standards publication sets forth specific declarations that have to be added to your statement of square footage and failure to provide the declarations (where applicable) voids any claim of adherence to the standard. The publication also provides examples of scenarios a professional might run into and provide suggested declarations to illustrate how to deal with unique issues.

LIA Administrators & Insurance Services does not have any suggestions for additional declarations to add to your report as the ANSI standards publication addresses the language required and provide examples of how to narrate additional declarations as needed.


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