NAVY FEDERAL CREDIT UNION APPRAISAL REQUIREMENTS

Page 1 URAR – SUBJECT SECTION

Subject Address must match USPS exactly

Occupancy: If Tenant occupied- Please provide the monthly rent.

Special Assessments

For the question “Is the subject currently offered for sale or has it been offered for sale in the past 12 months?” a 3 rd party data source must be provided if the subject has not been listed.

Neighborhood Name

CONTRACT SECTION

If the contract section is not applicable

If there is a contract

NEIGHBORHOOD SECTION

Location

UrbanSuburbanRural

One- Unit Housing Trends

Present land use

Neighborhood Boundaries

Neighborhood Description

Market Conditions

Predominant value

SITE SECTION

Dimensions: The actual lot dimensions must be provided or state no survey or plat available. If you state “See Attached Plat,” please be sure that the dimensions are on the plat.

Zoning: If No Zoning or Non-Conforming Zoning, please comment whether the subject could be rebuilt if destroyed.

Utilities: If Water or Sewer is private a comment is required stating the impact on marketability. Comment if public water/sewer is available.

Flood Zone: If in Flood Zone please comment on what, if any, impact on marketability. Include Flood Map if available. Will a variance be needed? Please comment on any specific conditions, verification sources, and any impact on value/marketability.

Adverse Site Conditions or External Factors: Please be sure to comment on the impact of any adverse or external factors. If the factors do not present an effect on marketability then the appraiser should include a comment that it does not cause a concern or affect the marketability.

Street: If the subject is on a private road please comment who maintains the road.

IMPROVEMENTS

General Description: Design Style

*UAD does not allow for the design style to include # of stories or descriptors such as condition or materials.

Exterior and Interior Description

Amenities Section

Car Storage

Condition Rating: Please be sure to review the condition rating definitions for UAD.

The client requires that the condition be at a minimum of a C4 condition rating. Upon inspection, if you find that the condition is below a C4 (i.e. C5 or C6), please STOP and contact VMG immediately.

*A common error is the rating being a C1 when the home has been occupied. According to the UAD definition, a C1 has never been occupied.

Actual Age vs. Effective Age: If there is a significant difference in the subject’s actual age and effective age, please indicate why.

Handrails and Guardrails: Handrails are required on all stairs more than four risers in height. Guardrails are required on the open side of stairs, landings and balconies which are more than 30 inches above the floor or grade below.

Physical Deficiencies or Adverse Conditions that affect the livability, soundness or structural integrity of the property.

*If any items exist, the appraisal report must be “Subject to” the repair(s) in order to remediate these items.

Major Renovations or Additions: If the subject has any addition or conversion, please indicate whether or not it was legally permitted. If no permits were obtained the appraiser should make the appraisal “Subject To” the proper and required permits.

Bonus Rooms/FROG: If the subject has a bonus room above the garage, please comment as to how the bonus room is accessed and whether it is heated and cooled, and finished to the same quality of construction as the main living area.

Page 2 URAR

The top of Page 2 URAR above the sales grid should match the 1004MC form or the appraiser should include comments as to why the data differs from the 1004MC form.

SALES GRID

Address: The subject and comparable addresses must match USPS exactly.

Proximity to Subject: UAD requires the Directional to be included. For example: N, S, E, W.

Data Source: UAD requires the MLS # to be included on this line and the DOM following the MLS #.

REQUIRED COMMENTS FOR THE SALES GRID

For any item on the sales grid that differs from the subject and no adjustment is warranted then a “0” must be entered on the adjustment field. If an adjustment is warranted then comments should be made supporting the adjustments and how derived.

Quality or Condition adjustments

For any item that cannot be bracketed by a closed comparable sale

AGE

GLA

Basement

Distance/Time

Declining or Increasing Values

Active/Pending Listings: 2 active or pending listings are required.

Net/Gross/Line Adjustment Percentages: The client requires that the appraiser specifically comment on any comparable where the adjustment exceeds the 15% net/25% gross and 10% line adjustment guideline.

****A blanket statement is not acceptable.

(i.e., Comparable 1 exceeded the 15% net guideline due to…., Comparable 2 exceeded the 15% net and 25% gross guideline due to….)

Above Grade Room Count: UAD adjustment guidance states “If a feature or aspect of the subject property differs from a feature or aspect of a comparable property and the appraiser determines that no adjustment is warranted, the appraiser must enter a zero (0) in the adjustment line. The zero (0) will indicate to the reader/user of the report that the appraiser considered the difference and determined that no adjustment should be made. When the features for the subject and comparable sale's) are the same and no adjustment is warranted, leave the field blank - do not enter or default to zero”. In an effort to adhere to UAD guidelines and remain consistent and clear to the reader, please provide Bedroom adjustments to line 1, Bathroom adjustments to line 2 and total room count adjustments under Functional Utility.

PRIOR TRANSFER HISTORY

The Data Source and Effective date of Data Source should be included for the subject and comparables.

*The Effective date of data source should be in MM/DD/YYYY format for UAD compliance.

If any prior transfers of the subject or comparable’s is noted, provide comments discussing the analysis of the prior transfer.

COST APPROACH

NFCU does not require the cost approach.

Site value is always required. Support for site value should not just be tax assessor. Acceptable support for site value could be alternative methods such as allocation or extraction or land sales, for example.

If the site value exceeds 30% of the total value the appraiser should include commentary as to whether the land to value ratio is typical and any affect on future marketability this may have.

Remaining Economic life is required for FHA and USDA loans, however, regardless of transaction type, we recommend the appraiser always include.

PAGE 3 URAR – PUD SECTION

If the subject is in a PUD then the appraiser should:

Check Yes or No for “is the developer in control of the HOA?”

Check Unit Type- Attached/Detached or both in some cases.

The rest of the section is ONLY required when the developer is in control of the HOA and the unit type is Attached.

PAGE 6 – CERTIFICATION

UAD requires the Appraisers name and License number to match ASC.GOV exactly.

You can verify how the appraisers name/license # is listed by visiting www.ASC.Gov .

For example, if ASC.GOV has Joe M Smith then Joe Smith is not correct. It would have to include the middle initial regardless of how you sign your name. It must match ASC.Gov for a successful UCDP transmission.

The Date of signature, Effective date of report and Expiration date of certification or license must be in MM/DD/YYYY format for UAD compliance.

The AMC name (Valuation Management Group) should be listed on NAME field under the Lender/Client section.

TIPS FOR THE 1004MC FORM

If the Months of supply is over 12 months yet “In Balance” is indicated on page one of the URAR then comments should be made to support the trends and why they conflict.

If there is not enough statistical data to derive trends, then comments should be noted on the 1004MC form and support for trends indicated on page one of the URAR and on the 1004MC form.

*If a condominium the top section of the 1004MC form should be completed on ALL competing projects and the lower section should be completed on the subject’s project only. Be sure that the # of Active Comparable Listings in the subject Project section matches Page 1 of the 1073 Condominium form for Project Information # of Units for sale.

ADDITIONAL FORMS TO BE INLCLUDED

PHOTO REQUIREMENTS

Subject frontSubject rearStreet sceneAll bathroomsMain living areaKitchenAny additional amenity that is given value or noted in the appraisalAny items that require repair or that are considered deferred maintenance itemsIf there are views or external factors presentPhotos with people present are not permitted

REQUIRED COMMENTS FOR APPRAISAL REPORTS

AS IS VALUE: If the appraisal is made “Subject To” Completion or repairs an AS IS value is required to be included in the additional comments for compliance with Interagency guidelines.

Exposure Time - In order to assure that intended users understand the context in which the opinion of value is developed, the Board has adopted revisions to make it a clear requirement that reasonable exposure time must be reported in all assignments in which an opinion of reasonable exposure time must be developed. As clarified in the 2012-13 edition of USPAP, exposure time must be developed: When exposure time is a component of the definition for the value opinion being developed.

Example Disclosure:

EXPOSURE TIME: The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective opinion based on an analysis of past events assuming a competitive and open market. The appraisers have determined the subject property would have to be exposed for XX to XX months or years (time frame) on the open market in order to have a market value of $XXX,XXX on the effective date of this appraisal.

Appraiser Independence: VMG is requesting that a similar comment be added to all appraisal orders to certify appraiser independence. Please certify the following in your appraisal:

“I certify, as the appraiser, that I have completed all aspects of this valuation, including reconciling my opinion of value, free of influence from the client, client’s representatives, borrower, or any other party to the transaction.”

USPAP Prior Service disclosure: Certifications now require appraisers to state whether or not they have provided services on the subject property for the last 36 months from the effective date of value; this is a change from prior criteria.

Example: I have performed no (or the specified) other services, as an appraiser or in any other capacity, regarding the property that is the subject of the work under review within the three-year period immediately preceding acceptance of this assignment. NOTE: The current Fannie Mae forms do not include this on the certification page.