Why Appraiser Selection Matters for Your Loan
When you apply for a mortgage, your lender must order an appraisal to determine your home's value. This appraisal directly affects your loan amount, interest rate, and whether you need mortgage insurance. Fannie Mae requires lenders to use only qualified, licensed appraisers who know your local market.
The appraiser selection process happens behind the scenes, but it impacts you directly. A qualified appraiser familiar with your neighborhood will produce a more accurate valuation. An inexperienced appraiser might miss important market factors or comparable sales, potentially affecting your loan approval.
Say you're buying a home in a specialized market like a historic district or an area with unique architectural styles. Your lender must choose an appraiser who understands these property characteristics and has access to relevant comparable sales data.
Who Can Appraise Your Property
Your appraiser must hold a current state license or certification. The license must be active on the date they complete your appraisal report. This requirement applies in all states and follows federal law established in 1989.
Appraiser trainees can perform significant portions of the appraisal work, including the entire appraisal if they're qualified. However, a licensed supervisory appraiser must review and sign the report. The trainee signs the left side of the certification, while the supervisor signs the right side.
For example, if a trainee inspects your property and researches comparable sales, they can sign as the appraiser. But their supervising appraiser must review the work, agree with the conclusions, and take full responsibility for the report.
Local Market Knowledge Requirements
Your appraiser must have specific knowledge of your property's location and type. They need access to local data sources, including multiple listing services and government records. This isn't just about having a license—it's about understanding your specific market.
Fannie Mae doesn't allow the flexibility that other appraisal standards permit. While some guidelines let appraisers accept assignments outside their expertise if they follow certain procedures, Fannie Mae prohibits this practice.
Consider a scenario where you're buying a waterfront property in a resort area. Your lender cannot use an appraiser who specializes in urban condominiums but has never valued lakefront homes. The appraiser must demonstrate experience with waterfront properties and knowledge of seasonal market patterns.
How Lenders Select Your Appraiser
Your lender controls the appraiser selection process completely. You cannot order your own appraisal or use one provided by your seller, real estate agent, or any other party with an interest in the transaction. This independence requirement protects against inflated valuations.
Many lenders use appraisal management companies (AMCs) to handle appraiser selection. Even when using an AMC, your lender remains responsible for the quality of the appraisal work. The lender must establish policies to ensure qualified appraisers are selected according to Fannie Mae requirements.
Quality trumps speed and cost. Your lender must prioritize the appraiser's ability to produce high-quality work over turnaround time or fees. This means your appraisal might take longer if it ensures better accuracy.
Lender Monitoring and Quality Control
Your lender must maintain ongoing oversight of the appraisers they use. This includes annual reviews of each appraiser's license status and procedures for suspending or terminating relationships with underperforming appraisers.
Lenders must also have procedures for referring problematic appraisers to state licensing boards. This quality control system helps protect you from inaccurate appraisals that could affect your loan terms or approval.
If your lender discovers an appraiser consistently produces questionable work, they must stop using that appraiser's services. This ongoing monitoring helps maintain appraisal quality across all loans.
What Documents Prove Appraiser Qualifications
Your appraiser must include their license or certification number on the appraisal report. This allows verification of their credentials and current license status. The license information appears in the appraiser certification section of the report.
For trainees working in jurisdictions that don't issue license numbers, the term "Trainee" should appear in the "Other" field of the certification section. The supervising appraiser's license information must also be clearly documented.
Your lender must verify and document that the appraiser's license was active on the effective date of your appraisal. This verification becomes part of your loan file.
Common Issues That Can Delay Your Loan
Expired licenses create immediate problems. If your appraiser's license expired before completing your appraisal, the lender cannot use the report. You'll need a new appraisal from a properly licensed appraiser, causing delays and additional costs.
Appraiser inexperience with your property type or location can lead to inaccurate valuations. If the appraisal comes in too low, you might need to renegotiate your purchase price, bring more cash to closing, or find a different property.
Using an appraiser you selected yourself will disqualify the appraisal entirely. Even if you paid for an appraisal before applying for your loan, your lender cannot use it. They must order a new appraisal through their approved channels.
Quality issues discovered during underwriting can require a new appraisal. If your lender's review reveals significant problems with the original appraisal, they may need to order a replacement, extending your closing timeline.
References
For the official guidelines, see B4-1.1-03: Appraiser Selection Criteria in the Fannie Mae Selling Guide.
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Original Fannie Mae Guideline Text
B4-1.1-03, Appraiser Selection Criteria (06/04/2025)
Supervisory Appraiser
Uniform Appraisal Dataset (UAD) 3.6 Policy
Appraiser License and Certification
Fannie Mae requires a lender (or its authorized agent) to use appraisers or supervisory appraisers that are state-licensed or state-certified (in accordance with the provisions of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 and all applicable state laws). The lender (or its authorized agent) must document that the appraisers it uses are licensed or certified as appropriate under the applicable state law. The lender must ensure that the state license or state certification is active as of the effective date of the appraisal report. The appraiser must note their license or certification number on the individual appraisal report forms, in compliance with the Uniform Appraisal Dataset Specification, Appendix D: Field-Specific Standardization Requirements.
Fannie Mae’s appraisal report forms identify the appraiser as the individual who
performed the analysis, and
prepared and signed the appraisal report as the appraiser.
This does not preclude appraisers from relying on individuals who are not state-licensed or state-certified to provide significant professional assistance, such as an appraiser trainee or an employee of the appraiser doing market data research or data verification in the development of the appraisal. Under some state laws, a lender’s use of an unlicensed or uncertified appraiser that is working as an employee or sub-contractor of a licensed or certified appraiser will satisfy the state’s licensing and certification requirement, as long as the appraisal report is signed by a state-licensed or state-certified supervisory or review appraiser. The state-licensed or state-certified appraiser that signs the appraisal report must acknowledge in the report the extent of the professional assistance provided by others and the specific tasks performed by each individual, and must certify that each named individual is qualified to perform the tasks.
Appraiser Trainees
Fannie Mae allows an unlicensed or uncertified appraiser, or trainee (or other similar classification) to perform a significant amount of the appraisal (or the entire appraisal if they are qualified to do so). If an unlicensed or uncertified individual provides significant professional assistance, they must sign the left side of the appraiser certification as the Appraiser if
they are working under the supervision of a state-licensed or state-certified appraiser as an employee or sub-contractor,
the right side of the appraiser certification is signed by that supervisory appraiser, and
it is acceptable under state law.
If the jurisdiction does not provide license numbers for trainees, the term “Trainee” should be entered in the “Other” field in the Appraiser Certification section.
Lenders must use appraisers that
have the requisite knowledge required to perform a professional quality appraisal for the specific geographic location and particular property type; and
have the requisite knowledge about, and access to, all necessary and appropriate local data sources for the subject property's geographic area, including multiple listing service(s) and government records.
Appraisers that are not familiar with specific real estate markets may not have adequate information available to perform a reliable appraisal. Although the Uniform Standards of Professional Appraisal Practice (USPAP) allows an appraiser that does not have the appropriate knowledge and experience to accept an appraisal assignment by providing procedures with which the appraiser can complete the assignment, Fannie Mae does not allow the USPAP flexibility.
The lender
is responsible for the selection of appraisers and for the qualifications and quality of work provided by the appraisers that are selected;
may not use appraisals ordered or received by borrowers or other parties with an interest in the transaction, such as the property seller or real estate agent. Fannie Mae does allow lenders to use third-party vendors (for example, appraisal management companies) to manage the appraiser selection process. However, it should be noted that if a lender enters into a contract with any vendor, contractor, or third-party service provider, the lender is accountable for the quality of the work performed as if it was performed by an employee of the lender.
The lender (or its authorized agent) must
establish policies and procedures to ensure that qualified individuals are being selected in accordance with Fannie Mae requirements, including the Appraiser Independence Requirements.
ensure that an appraiser has demonstrated the ability to perform high-quality appraisals before using an appraiser’s services. The quality of an appraiser’s work is a key criterion that must be used in determining which appraiser the lender (or its authorized agent) uses for its assignments. The requirement for an appraiser to produce a high-quality work product must always outweigh fee or turnaround time considerations.
develop and maintain a documented process to monitor the appraisers it uses. The process (at a minimum) must include an annual review of an appraiser's state licensing or certification status and a procedure for suspending or terminating business with individual appraisers. Additionally, the lender must have a procedure for referring appraisers to the applicable state appraiser licensing and regulatory board.
Delegating these responsibilities to a third party does not relieve the lender of its responsibilities related to the appraisal or the value, condition, and marketability of the property. See B4-1.3-12, Appraisal Quality Matters, for information related to ongoing review of appraisals.
Note: Fannie Mae does not approve appraisers. Therefore, when selecting appraisers, lenders must not give any consideration to an appraiser’s representation that they are approved or qualified by Fannie Mae.
Supervisory Appraiser
As noted in the License and Certification section in this topic, Fannie Mae allows an unlicensed or uncertified appraiser, or trainee (or other similar classification) that works as an employee or subcontractor of a licensed or certified appraiser, to perform a significant amount of the appraisal (or the entire appraisal if they are qualified to do so), as long as the appraisal report is signed by a licensed or certified supervisory or review appraiser and is acceptable under state law.
If a supervisory appraiser is used, the supervisory appraiser does not need to physically inspect the subject property or comparables, but must sign the right side of the report and certify that they
directly supervised the appraiser that prepared the appraisal report,
have reviewed the appraisal report,
agree with the statements and conclusions of the appraiser,
agree to be bound by certifications as set forth in Fannie Mae’s appraisal report forms, and
take full responsibility for the appraisal report.
A supervisory appraiser may not sign the left-hand side of the appraisal report unless they have met the requirements of the appraiser as noted in the License and Certification section in this topic.
Uniform Appraisal Dataset (UAD) 3.6 Policy
Lenders using UAD 3.6 must follow the requirements in the UAD 3.6 Policy Supplement .
