If they are selling the loan onto one of the GSE's, tell your client to avail themselves of a 1004D alternative. From the selling guide –
Form 1004D and Completion Alternatives
Form 1004D
The
Appraisal Update and/or Completion Report (
Form 1004D) is used to update an appraisal or provide confirmation that the requirements or conditions in an appraisal report have been met (such as completion of construction or repairs).
The appraiser can complete the Completion Report section of Form 1004D based on an on-site visual inspection of the property. The appraiser may also complete the form based on alternative methods, such as virtual inspections, digital photos, site videos, or other technological solutions. All completion documentation must include one or more visually verifiable exhibits. A link to the digital exhibits from within the form is acceptable but must be accessible by Fannie Mae for the life of the loan. These exhibits must be unaltered and able to be authenticated using metadata and the geocode for the subject property.
See
B4-1.2-04, Appraisal Age and Use Requirements, for certifications completed by substitute appraisers.
Attestation Letters
Fannie Mae also permits other completion alternative methods - attestation letters - to verify completion of construction, alteration, or repairs in lieu of Form 1004D.
Borrower/builder attestation letter: For new or proposed construction, a letter is permitted to confirm the property was completed and constructed in conformity with the plans and specifications, amendments, and change orders. The borrower/builder attestation letter must include (at a minimum) the following items:
- borrower name,
- property address or legal description if the address is not available,
- certification language that the property was constructed in conformity with the plans and specifications including any amendments or changes,
- signatures and dates by the borrower(s) and builder, and
- exterior and interior photos of the property (see B4-1.2-01, Appraisal Report Forms and Exhibits).
If a letter signed by both parties is not obtainable, then a Form 1004D completed by the appraiser is required.
Borrower attestation letter: A letter is permitted to confirm completion of certain alterations or repairs for existing construction. The letter must include (at a minimum) the following:
- borrower name;
- property address;
- certification language that the alteration or repair was satisfactorily completed;
- signatures and date of the borrower;
- visually verifiable exhibits of the completed work; and
- one of the following
- signature of the qualified professional,
- a professionally prepared report, or
- paid invoices for the alterations or repairs.
When either of these attestation letter options is used, a link within the letter to any digital exhibits is acceptable but must be accessible by Fannie Mae for the life of the loan. These exhibits must be unaltered and able to be authenticated using metadata and the geocode for the subject property. The letter and all documentation must be retained in the loan file.
Criteria for Use of Form 1004D and Completion Alternatives
Use of Form 1004D and completion alternatives varies depending on the type of valuation method and condition (completion, alteration, inspection, or repair) that must be verified.
selling-guide.fanniemae.com
