The Biggest Change to Home Appraisals in Years Is Coming This November

If you are planning to buy a home, refinance, or sell in the coming months there is a change to the appraisal process that deserves your attention. Fannie Mae and Freddie Mac are rolling out a brand new appraisal form this November and it represents one of the most meaningful updates to how homes are formally valued in years.

What Is Actually Changing

The existing appraisal form has long relied heavily on checkboxes and standardized fields that leave appraisers limited room to explain the nuances of what makes a specific property worth what it is worth. A home with custom upgrades, a thoughtfully designed outdoor living space, an accessory dwelling unit, or energy efficient features that add genuine value has often been difficult to document accurately under the existing framework. Appraisers knew the value was there. The form did not always give them an effective way to communicate it.

The new form changes that. As Kendra LaManna at New American Funding explains the updated report gives appraisers more flexibility to tell the story of a home's value rather than simply checking boxes that may not capture what makes a specific property stand out.

What This Means for Buyers

For buyers the practical implication is an appraisal process that does a better job of capturing the full picture of what they are purchasing. Properties with features that older forms struggled to document accurately now have a mechanism for those features to be communicated in a more meaningful and defensible way.

Custom kitchen renovations. Outdoor kitchens and living areas. ADUs that add usable space and income potential. Solar and energy efficient improvements. Unique architectural details. These are all elements that can now be documented more completely in a way that supports the value conclusion rather than being noted briefly in a comments section that carries limited weight.

This does not mean homes will automatically appraise for more under the new form. What it means is that appraisers have better tools to accurately communicate value that was always present but sometimes poorly captured. More consistency and more transparency throughout the lending process benefits everyone involved in the transaction.

Who This Affects

First-time buyers going through the appraisal process for the first time will encounter a more modern and thorough report. Move-up buyers purchasing homes with distinctive features or significant improvements will have those features better represented in the formal valuation. And homeowners refinancing will benefit from appraisers being better equipped to document what they have invested in and improved about their property over time.

What to Do Before November

The change is coming in November and if you have questions about what it means for a specific purchase or refinance you are planning Kendra LaManna at New American Funding is ready to walk you through it. You find the home and she will find the loan.

Sources

FannieMae.com
FreddieMac.com
MortgageNewsDaily.com
ConsumerFinancialProtectionBureau.gov
AppraisalInstitute.org