No Central HVAC - Fannie Mae Policy

[alebrewer]

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Fannie Mae requires properties to have a reliable and permanent heat source for year-round occupancy, meaning it must be self-fueled and permanently installed. This generally includes forced air systems, radiant heat, baseboard heaters, or wall units, but not space heaters, fireplaces, or wood stoves unless they meet specific criteria (e.g., reservoir capacity).

Here's a more detailed breakdown:

What's acceptable?

• Forced air heating systems: These are the most common and generally qualify.
  
  
• Wall furnaces: Common in older homes, they also qualify.
  
  
• Split system heat pumps: These newer systems with exterior compressor/condenser and interior air handlers also meet requirements.
  
  
• Pellet stoves: If the reservoir can last 1-2 days before refilling, they're acceptable.
  
  
• Radiant floor heating systems: These systems with hot water flowing through the floors are acceptable.
  
  
• Baseboard heaters: Electric baseboard units are acceptable.
  
  
• Installed wall units: These also qualify as permanent heat sources.

What's NOT acceptable as a primary heat source?

• Space heaters: Portable, non-installed heaters are not considered permanent.
  
  
• Fireplaces: Unless they are a primary source of heat and meet certain criteria (e.g., fuel capacity for pellet stoves), they are not sufficient on their own.
  
  
• Wood stoves: Similar to fireplaces, they require a reliable backup heat source to meet the "year-round occupancy" requirement.

( I found the above on AI, I can not confirm whether accurate or not -)

It is not accurate. The Selling Guide is the document that is used to determine accurate - not AI. Aren't you the one who doesn't believe in AI?

 

[Terrel L. Shields]

Pellet stoves: If the reservoir can last 1-2 days before refilling, they're acceptable.

That's a newer requirement. Interesting. I never figured pellet stoves would qualify.

PS - you beat me to posting and it is dead on. We've got a lot of homes with window AC. I just finished appraising one a couple weeks ago. About a 20-year-old house as I recall. But non-conforming work doesn't worry much about FNMA.

 

[Terrel L. Shields]

The Selling Guide

I don't think it mentions it much anymore.

 

[alebrewer]

If I ever build a new house again, it will be with mini-splits, not an HVAC.

 

[alebrewer]

I don't think it mentions it much anymore.

It says that the heating must be commensurate with market expectations - and that if it's not, its the appraiser's job to determine what the impact is.

 

[Terrel L. Shields]

and that if it's not, its the appraiser's job to determine what the impact is.

that is a pretty 'iffy' requirement. Who is to say?

 

[alebrewer]

that is a pretty 'iffy' requirement. Who is to say?

We do it all the time... subject has a feature that is functionally inadequate and we measure the impact of that in the market... easy peasy.

 

[Terrel L. Shields]

subject has a feature that is functionally inadequate and we measure the impact of that in the market... easy peasy.

Being unique is not being inadequate even if there is market resistance. Geothermal is by far the best heat pump solution but boy, try and sell that in the real world. And, if I were building a new home, you can bet I would go the geothermal route even knowing the market would discount it.

 

[alebrewer]

Being unique is not being inadequate even if there is market resistance.

Lacking a permanent heat/ac source when all the other homes in the market have them is inadequate, not unique. Good thing is - remedy is pretty inexpensive. Min-Splits are < $1k/room.

 

[Terrel L. Shields]

Lacking a permanent heat/ac source

But an old fashion Warm Morning gas stove with a thermostat and a window AC or two, well is that 'inadequate', or simply becoming increasingly uncommon? And, at the horrific cost of CHA now and the rather short live expectancy of the modern AC, I am surprised more homes are not equipped with mini-splits and gas heaters (if your electric is high.)

If you want maximum efficiency, and regardless all the babble about energy savings, builders are not building super-efficient homes because the buying public doesn't want them. It is stupid. You can super insulate a house (solid cellulose is best), caulk the sole plates, triple pane windows, seal around the electrical outlets that are on exterior walls, use LED lights and efficient appliances and slash your E bill by half or more. But no one wants to pay for it. They'd rather pay the electric company double for the next 40 years.