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URAR vs SRIP for "two-family use"

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Frederick R. Ruffell

Senior Member
Jan 21, 2002
Professional Status
Certified General Appraiser
I was just doing a "little extra reading" on the SRIP report as I try to specialize in this type of appraisal and property. The "new" text is called The Small Residential Income Property Appraisal Report, second edition, Arlen C. Milla and Dorothy Z. Mills. This is an Appraisal Institute publication. The following text appears under the heading "Fannie Mae Note" under "summary of the S.R.I.P.

In certain circumstances appraisers have the option of using either the SRIP (Freddie Mac form 72/Fannie Mae Form 1025) or the URAR (Freddie Mac Form70/Fannie Mae Form 1004). Either Form can be used fo the appraisal of

Two-family properties when the value of the second unit is relatively insignificant (e.g., when the second unit is a legal or legally nonconforming basement unit or a unit over the garage and its contribution to the total value of the property is minimal)

Two-family properties when each of the units is occupied by one of the co-borrowers as his or her principal residence.

Some single family properties include an illegal second unit or accessory appartment, which is typically refferred to as a mother-in-law, mother/daughter, or granny unit. These properties are acceptableas security for mortgages that Fannie Mae purchases or securitizes under two conditions: 1) the illegal use must conform to the subject neighborhood, and 2) the property must be appraised and underwritten in accordance with the requirements discussed in Fannie Mae's July 19, 1989, letter on land use under single family zoning classification. Appraisals of properties characterized as a legal or legally nonconforming, two-family use should not be documented on the SRIP Appraisal Report. The URAR should be used instead.

My question? Is this still true now, especially the last two lines? if so can anyone point me to the most current FNMA documents that spell this out ?
Also can anyone provide me with the above mentioned requirements discussed in Fannie Mae's July 19, 1989, letter on land use under single family zoning classification.


Junior Member
Jan 15, 2002
Fredrick, take a look at the new Fannie Mae Selling Guide, Section 203.01 and Section 404.01. I think this will answer your questions and it appears to incorporate the referenced 1989 document.
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