FHA FHA Appraisal Report Writing & Standards 1 — Questions and Answers
Question 1: Which form is the standard report form required for FHA single-family appraisals of one-unit properties?
- Fannie Mae Form 1004 (URAR) (Correct answer)
- Fannie Mae Form 1073
- HUD Form 92800.5B
- Fannie Mae Form 1025
Correct answer: Fannie Mae Form 1004 (URAR)
The Uniform Residential Appraisal Report (URAR), Fannie Mae Form 1004, is the standard form required for FHA single-family one-unit property appraisals.
Question 2: Under USPAP, an FHA appraisal report must contain a signed certification. Which of the following is a required certification statement?
- The appraiser has a financial interest in the subject property
- The appraiser's compensation is contingent on the appraised value
- The appraiser has performed an impartial and unbiased analysis (Correct answer)
- The appraiser guarantees the accuracy of all data sources
Correct answer: The appraiser has performed an impartial and unbiased analysis
USPAP requires a certification that the appraiser has performed an impartial and unbiased analysis, free from undisclosed conflicts of interest.
Question 3: When an FHA appraiser uses the sales comparison approach, what is the maximum age of comparable sales typically acceptable under HUD guidelines?
- 3 months
- 6 months (Correct answer)
- 12 months
- 24 months
Correct answer: 6 months
HUD guidelines generally require that comparable sales used in an FHA appraisal be no older than 12 months, though 6 months is preferred and older comps require justification.
Question 4: What is the primary purpose of the 'subject' photographs required in an FHA appraisal report?
- To satisfy lender marketing requirements
- To document the property's condition and support the appraiser's observations and conclusions (Correct answer)
- To comply with state licensing board requirements only
- To assist the real estate agent in listing the property
Correct answer: To document the property's condition and support the appraiser's observations and conclusions
Required photographs of the subject property document its physical condition and serve as visual support for the appraiser's observations and value conclusions.
Question 5: In an FHA appraisal report, what must an appraiser disclose if they have appraised the subject property within the prior three years?
- Nothing, prior appraisals are confidential
- The prior service must be disclosed in the certification (Correct answer)
- Only if the prior appraisal resulted in a different value
- Only if the lender specifically asks
Correct answer: The prior service must be disclosed in the certification
USPAP requires appraisers to disclose prior services performed on the subject property within three years in the certification of the appraisal report.
Question 6: Which statement best describes the FHA appraiser's obligation when market conditions are declining?
- Use only the most favorable comparable sales to support value
- Report declining market conditions and ensure adjustments reflect current market trends (Correct answer)
- Ignore market trends if the property physically qualifies
- Rely solely on the cost approach in declining markets
Correct answer: Report declining market conditions and ensure adjustments reflect current market trends
When market conditions are declining, FHA appraisers must report this in the neighborhood section and ensure all value indications and adjustments reflect current market trends.
FHA FHA Appraisal Report Writing & Standards 1
Which form is the standard report form required for FHA single-family appraisals of one-unit properties?