Why This Matters for Your Home Purchase
When you're buying a home, the appraiser needs specific information about both your property and your purchase contract to determine the home's value. This isn't just paperwork — these requirements protect you and your lender from overpaying for a property or missing important details that could affect the loan approval.
The appraiser acts as an independent third party who verifies that the price you're paying makes sense based on recent sales of similar homes. To do this job properly, they need accurate property identification and complete contract details.
Property Identification Requirements
The appraiser must identify your property using its complete street address in the format required by the United States Postal Service. This means the exact address including unit numbers for condos, formatted according to official USPS standards.
Say you're buying a condo at 123 Main Street, Unit 4B, in Springfield. The appraiser can't just write "123 Main St" — they need the complete address with the unit number in the proper format. This precision prevents confusion and ensures the appraisal clearly identifies the exact property you're purchasing.
The appraiser also needs the legal description of the property. This is the technical description found in property records that precisely defines the boundaries and location. If the legal description is lengthy, the appraiser can attach it as a separate document to the appraisal report.
Recent Sales History Research
The appraiser must research whether your property has been offered for sale in the 12 months before the appraisal date. This requirement helps identify potential red flags like rapid price increases or properties that have been difficult to sell.
If the property wasn't listed in the past year, the appraiser must document what sources they checked to verify this. If it was listed, they must report every listing during that period, including the asking prices, listing dates, and where they found this information.
Consider a home that was listed six months ago for $450,000, taken off the market, and now under contract to you for $425,000. The appraiser must report both the previous listing and the current sale, which helps explain the pricing history and supports the current value conclusion.
Contract Analysis Requirements
Your lender must provide the appraiser with your complete, signed purchase contract. The appraiser then decides whether to analyze the contract terms and must explain their decision either way.
If they analyze the contract, they report their findings about how the terms might affect value. If they choose not to analyze it, they must explain why. This analysis helps determine if the contract price reflects fair market value or if special terms might inflate the apparent value.
The contract price you're paying must exactly match the sales price the appraiser uses in their sales comparison analysis. This consistency ensures the appraisal properly reflects your actual transaction.
Seller Concessions and Financial Assistance
The appraiser must identify and report any financial assistance being provided by the seller or other parties. This includes obvious items like seller-paid closing costs, but also less obvious assistance like below-market financing, gifts of personal property, or payment of HOA dues.
Suppose the seller agrees to pay $8,000 of your closing costs and also throws in the washer and dryer. The appraiser must report both the cash concession and the value of the appliances. This information helps the underwriter understand the true cost of your purchase and ensures the loan amount is appropriate.
The appraiser must provide the total dollar amount of all concessions when possible. If they can't determine exact amounts for everything, they report what they can quantify and describe the rest.
Documents Your Lender Must Provide
Your lender has specific responsibilities in this process. They must give the appraiser your complete, ratified purchase contract — not just selected pages or a summary. The contract must be fully executed with all signatures and addenda.
The lender cannot provide an incomplete contract and expect the appraiser to work around missing information. If amendments or addenda are signed after the initial contract, these must be provided to the appraiser as well.
Common Issues That Create Problems
One frequent problem occurs when the property address in your contract doesn't exactly match the address in public records. This can happen with new construction or properties where the address format has changed. The appraiser needs to identify and resolve these discrepancies.
Another issue arises when sellers offer concessions that aren't clearly documented in the contract. Verbal agreements or side deals can create confusion and potentially invalidate the appraisal. Make sure all seller assistance is properly documented in your written contract.
Properties with complex ownership structures or unusual legal descriptions can also create challenges. If you're buying a property with a lengthy legal description or special ownership arrangements, expect the appraiser to need additional time to properly document these details.
Why These Rules Exist
Fannie Mae requires this detailed property and contract documentation because accurate identification and transaction analysis are fundamental to reliable appraisals. The property identification requirements prevent mix-ups that could result in appraising the wrong property or using incorrect comparable sales.
The contract analysis requirements help ensure that the purchase price reflects genuine market value rather than artificial inflation from special financing terms or excessive seller concessions. This protects both you and your lender from overpaying for the property.
The recent sales history research helps identify properties that might have valuation issues or market acceptance problems. A property that's been listed multiple times at different prices might indicate pricing challenges or property condition issues that need investigation.
Special Considerations for Different Property Types
For condominiums, the appraiser must include the unit number in the property identification. This seems obvious, but unit number errors are surprisingly common and can invalidate an appraisal.
For properties with complex legal descriptions, such as those in planned unit developments or with easements, the appraiser may need to attach additional documentation to properly identify the property rights being appraised.
New construction properties sometimes have temporary addresses or legal descriptions that change before closing. Your lender and appraiser need to coordinate to ensure the final appraisal reflects the correct, permanent property identification.
References
For the official guidelines, see B4-1.3-02: Subject and Contract Sections of the Appraisal Report in the Fannie Mae Selling Guide.
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Original Fannie Mae Guideline Text
B4-1.3-02, Subject and Contract Sections of the Appraisal Report (06/04/2025)
Subject Section
The appraiser must identify the subject property by its complete property address and legal description. The appraiser must enter the physical property address, including the unit number for a condo, in a format that conforms to the United States Postal Service (USPS) address standards in Publication 28 – Postal Addressing Standards (pub28) for complete addresses. Address standards can be found at usps.com. The subject address must be populated consistently throughout the form.
When the legal description is lengthy, the appraiser may attach the full legal description as an addendum to the appraisal report. The appraiser must also identify the property rights to be appraised. (For eligibility requirements, see B2-3-01, General Property Eligibility.)
Fannie Mae's appraisal report forms require the appraiser to research and identify whether the subject property is currently for sale or if it has been offered for sale in the 12 months prior to the effective date of the appraisal by selecting either the ‘Yes’ or the ‘No’ checkbox. If the answer is ‘No,’ the data source(s) used must be provided. If the answer is ‘Yes,’ the appraiser must report on each occurrence or listing and provide the following information:
offering price(s),
offering date(s), and
data source(s) used.
For example, if the subject property is currently listed for sale and was previously listed eight months ago, the appraiser must report on both offerings.
Note: For appraisals required to be UAD compliant, Days on Market (DOM) must be reported.
See Fannie Mae and Freddie Mac Uniform Appraisal Dataset Specification, Appendix D: Field-Specific Standardization Requirements, and the associated FAQ’s, for additional information and examples regarding these topics.
Contract Section
The lender must provide the appraiser with a copy of the complete, ratified contract. The appraiser must indicate whether an analysis was or was not performed on the contract for sale. If an analysis was performed, the appraiser must provide the results of the analysis. If an analysis was not performed, the appraiser must provide an explanation why the analysis was not performed.
For appraisals required to be UAD compliant, the appraiser must also indicate the type of sale for the transaction. The appraiser may report any other relevant information in this field or elsewhere in the report regarding the sale type, including whether more than one sale type applies.
The appraiser must
enter an amount in the Contract Price field if the Assignment Type is a purchase transaction. Contract price must be the same as the sales price for the subject property in the Sales Comparison Approach section;
enter a contract date if the Assignment Type is a purchase transaction; and
indicate if the property seller is the owner of record.
The appraiser must indicate if there is any financial assistance such as loan charges, sales concessions or gift, or down payment assistance to be paid by any party on behalf of the borrower, including any closing costs or other payments from the seller or other third party. If there is financial assistance, the appraiser must
report the total dollar amount of the loan charges or concessions that will be paid (if the appraiser is not able to determine a dollar amount for all or part of the financial assistance, the number must reflect the total known dollar amount); and
provide a description of the items being paid.
Note: Financial assistance or concessions paid by any party on behalf of the borrower includes both monetary and non-monetary items, including below-market-rate mortgage financing, gifts of personal property, and payment of property taxes or HOA dues for a period of time.
See Fannie Mae and Freddie Mac Uniform Appraisal Dataset Specification, Appendix D: Field-Specific Standardization Requirements, for additional information regarding the Contract Section, and B4-1.3-09, Adjustments to Comparable Sales, for additional information regarding evaluating sales or financing concessions for comparables.
Uniform Appraisal Dataset (UAD) 3.6 Policy
Lenders using UAD 3.6 must follow the requirements in the UAD 3.6 Policy Supplement.
