What Makes Cooperative Appraisals Different
When you buy a cooperative unit, you're not buying real estate directly. You're buying shares in a corporation that owns the building, plus the right to occupy your specific unit. This ownership structure creates unique appraisal challenges that don't exist with condominiums or single-family homes.
The appraiser must determine the value of your cooperative interest — essentially your equity stake after accounting for the building's underlying debt. Say the appraiser determines your unit would be worth $200,000 if it were a regular piece of real estate. But your share of the cooperative's blanket mortgage is $60,000. Your cooperative interest value becomes $140,000.
This calculation matters because your loan amount cannot exceed the cooperative interest value. If you're trying to borrow $150,000 in the example above, the loan won't work even though the unit itself might support that loan amount.
Required Appraisal Form and Submission Process
Your lender must order the appraisal on Fannie Mae Form 2090, the Individual Cooperative Interest Appraisal Report. This form is specifically designed for cooperative units and differs significantly from standard residential appraisal forms.
The completed appraisal must be submitted to Fannie Mae's Uniform Collateral Data Portal and receive a "Successful" status before your loan can close. This electronic submission requirement means your lender cannot simply file the appraisal in your loan folder — it must pass Fannie Mae's automated review system.
The submission process typically adds 1-2 business days to your timeline. Plan accordingly if you're working with a tight closing schedule.
Financial Information the Appraiser Must Analyze
The appraiser needs extensive financial details about your cooperative project that go far beyond what's required for other property types. This information typically comes from Form 1074, Request for Cooperative Project Information, which the building's management company or board should complete.
Key financial data includes your unit's share allocation within the cooperative corporation. If your unit represents 50 shares out of 2,000 total shares, you own 2.5% of the building. This percentage determines your share of the blanket mortgage payments, maintenance fees, and any special assessments.
The appraiser must document all liens against the cooperative project, including the primary blanket mortgage and any secondary financing. They need the lender names, loan amounts, payment terms, and your unit's proportional share of each debt.
Monthly maintenance fees require detailed breakdown. The appraiser must report what's included — utilities, property taxes, insurance, reserves, management fees. They also need information about any special assessments, ground rent payments, or facility usage fees that affect your unit.
Tax abatements or exemptions get special attention. Many cooperative projects, particularly in urban areas, benefit from property tax reductions. The appraiser must document the current benefit amount, when it expires, and how much taxes will increase afterward.
How Appraisers Find Comparable Sales
Cooperative units present unique challenges for finding comparable sales. The appraiser must first comment on how well cooperative ownership is accepted in your local market. In cities like New York where cooperatives are common, this is straightforward. In markets where cooperatives are rare, the appraiser must address how this affects value and marketability.
For established cooperative projects, the appraiser should use two comparable sales from within your building when available, plus one sale from a competing cooperative project. Sales within your building are often the best indicators of value because they share the same financial structure, management, and building amenities.
If your cooperative project is new or recently converted, the comparable sale requirements flip. The appraiser should use one sale from your building (if any exist) and two sales from outside the project. For brand-new projects without any closed sales, all comparables must come from competing projects.
When cooperative sales aren't available, appraisers can use condominium sales as comparables. However, they must adjust these sales to reflect market preferences. If buyers in your area prefer condominiums over cooperatives, the appraiser must account for this preference in the valuation.
Why These Rules Exist
Fannie Mae's cooperative appraisal requirements address the unique risks of cooperative ownership. Unlike condominium owners who hold individual deeds, cooperative shareholders depend on the financial health of the entire corporation. If the cooperative defaults on its blanket mortgage, all shareholders lose their homes regardless of their individual payment history.
The detailed financial analysis requirements help lenders understand the cooperative's stability. A building with high maintenance fees, upcoming special assessments, or expiring tax abatements presents different risks than one with stable finances and adequate reserves.
The comparable sales requirements recognize that cooperative markets can be thin or non-existent in many areas. By requiring appraisers to address market acceptance and use appropriate adjustments, Fannie Mae ensures more accurate valuations in challenging markets.
Common Complications and Gotchas
Cooperative appraisals frequently encounter delays when the building's management company doesn't respond promptly to information requests. The appraiser cannot complete their work without the detailed financial data, and some management companies are slow to provide Form 1074 or equivalent information.
Buildings with unusual financial structures create appraisal challenges. Some cooperatives have multiple blanket mortgages, ground leases, or complex fee arrangements that make the pro-rata calculations difficult. Appraisers may need additional time to analyze these situations properly.
Market acceptance issues can significantly impact value. If your cooperative is one of only a few in the area, the appraiser may struggle to find appropriate comparables or may need to apply substantial adjustments that reduce the final value.
Expiring tax abatements represent a major valuation concern. If your building's property tax exemption expires soon, the resulting payment increase could affect both the cooperative's financial stability and your unit's marketability. Appraisers must factor these future obligations into their analysis.
New or recently converted cooperatives face additional scrutiny. Without a track record of sales within the building, appraisers must rely more heavily on competing projects, which may not reflect your building's specific characteristics or market position.
References
For the official guidelines, see 5705.8: Appraisal requirements for Cooperative Units in the Fannie Mae Selling Guide.
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Original Freddie Mac Guideline Text
Bulletin 2025-7
, which announced the policy requirements for Uniform Appraisal Dataset (UAD) 3.6. Sellers may submit to the Uniform Collateral Data Portal
®
appraisal reports that use UAD 3.6 before the mandatory effective November 2, 2026 version of this section.
This section contains requirements related to:
Cooperative Interest
General appraisal requirements for units in Cooperative Projects
Comparable sale requirements for units in Cooperative Projects
The Seller must obtain an appraisal of the Cooperative Unit with an interior and exterior property inspection reported on
Fannie Mae Form 2090, Individual Cooperative Interest Appraisal Report
(opens in new window)
, which must be submitted to the Uniform Collateral Data Portal
®
(UDCP
®
) in accordance with the requirements in
Chapter 5606
and must receive a “Successful” status before the Delivery Date of the Cooperative Share Loan.
(a)
Cooperative Interest
The Cooperative Interest is the Cooperative Shares (or ownership interest) in the Cooperative Corporation and the related occupancy rights, excluding the Cooperative Interest's Pro Rata Share of the underlying Blanket Mortgage. The Cooperative Interest is the equity portion that is over and above the Pro Rata Share of the Blanket Mortgage(s).
(b)
General appraisal requirements for units in Cooperative Projects
When appraising a Cooperative Unit, appraisers must develop the opinion of market value for the Cooperative Interest. To determine the value of the Cooperative Interest, appraisers must report and analyze including, but not limited to, the following information:
Number of shares attributable to the subject unit
Number of shares issued and outstanding for the Cooperative Corporation
Lienholder name, lien position and the amount and repayment terms for all the Cooperative Project's blanket financing
Pro Rata Share of the Blanket Mortgage payments attributable to the subject unit, determined by dividing the number of shares attributable to the subject unit by the total number of project shares
Pro Rata Share of each lien attributable to the subject unit
Any tax abatements or exemptions that are attributable to the subject unit
Remaining term for any tax abatements or exemptions and provisions for escalation of real estate taxes (dollar amount by which the taxes will increase and the year in which the increase occurs); and
Monthly Maintenance Fees, including:
Utility charges (if included in the fee)
Ground rent; and
Other fees for the use of the facilities that are attributable to the unit (fee type, amount and term)
This information can generally be developed through
Fannie Mae Form 1074, Request for Cooperative Project Information
(opens in new window)
, if the management agent, Cooperative Corporation or project sponsor/developer uses the form to respond to Seller or appraiser inquiries for project information. When Fannie Mae Form 1074 is used, appraisers may either report the appropriate information in the appraisal report form or attach the Fannie Mae Form 1074 to the appraisal report as an addendum.
When reporting the information applicable to the Cooperative Unit and Cooperative Project, appraisers must:
Use reliable sources to obtain data on the Cooperative Project, the individual subject unit and the comparable properties and indicate each source by name on the appraisal report or an addendum to the appraisal report
Address any factors that could result in an increase to the monthly debt service for the subject unit
Indicate the dollar amount of the monthly Maintenance Fees for each of the comparable sales in the Sales Comparison Approach
Report the value of the Cooperative Interest, excluding the Pro Rata Share of the Blanket Mortgage(s). This value reflects the market value of the Cooperative Interest for the subject unit (e.g., if the indicated value of the unit encumbered by the Blanket Mortgage(s) is $100,000, and the unit's Pro Rata Share of the Blanket Mortgage(s)is $25,000, then the market value estimate that the appraiser must report for the Cooperative Interest is: $100,000 - $25,000 = $75,000).
Include a certification in the appraisal report that the Pro Rata Share of the Blanket Mortgage(s) on the real estate has not been included in the opinion of the market value of the Cooperative Interest
(c)
Comparable sale requirements for units in Cooperative Projects
Appraisers must comment on the acceptance of housing cooperatives in the Market Area. The degree of acceptance is generally reflected in the availability of similar comparable sales data for Cooperative Units. If there is limited market acceptance of the cooperative form of ownership or if cooperative forms of ownership are relatively new in the Market Area, appraisers must address any effect that has on the value and marketability of the Cooperative Unit that is being appraised. The appraiser must compare the subject unit to the general Market Area as well as to other units in the subject Cooperative Project to demonstrate the market acceptance of Cooperative Units in the area.
(i)
General comparable sale requirements
Comparable sales must be from similar types of projects that have similar Common Elements and recreational facilities, including, but not limited to, townhouses and mid-rise and high-rise buildings.
Appraisers must use Cooperative Units as comparable sales when they are available. Appraisers may also use condominium units as comparable sales if Cooperative Units are not available, with an explanation for why those types of comparables were used. The appraiser must adjust the condominium comparables to reflect the reaction of the market to the Cooperative Unit when there is a preference for condominium ownership in the subject Market Area. (See
Section 5605.6(g)
for general requirements regarding comparable sales selection.)
(ii)
Comparable sale requirements for units in Established Cooperative Projects
For Cooperative Units located in Established Cooperative Projects, the appraiser should use comparable sales from within the Cooperative Project when they are the best indicators of value for the subject property. The use of comparable sales that are located outside of the established subject Cooperative Project must be explained in the appraisal report.
When the subject Cooperative Unit is in an Established Cooperative Project, appraisers should use the following as comparable sales:
Two comparable sales from within the subject Cooperative Project, when available; and
One comparable sale from a competing Cooperative Project
Section 5605.6(g)
for general requirements regarding selection of comparable sales.
(iii)
Comparable sale requirements for units in recently converted or New Cooperative Projects
If the subject Cooperative Unit is in a recently converted or New Cooperative Project, appraisers should use the following as comparable sales:
One comparable sale from the subject Cooperative Project, when available; and
Two comparable sales from outside of the Cooperative Project
In the event the subject project is so new that a closed (settled) sale is not available, comparable sales from competing projects must be used. The appraiser must comment on the marketability of the new project and justify and support the use of the comparable sales from outside the Cooperative Project.
Section 5605.6(g)
for general requirements regarding comparable sales selection.
