Correspondent ALERT – Updates to Appraisal Valuation Requirements and Access, Elite & Foreign National Guidelines

Correspondent ALERT – Updates to Appraisal Valuation Requirements and Access, Elite & Foreign National Guidelines

 

Access, Elite & Foreign National – Guideline Updates

The Arc Underwriting Guide for Access Non-QM, Elite QM and Foreign National was updated within many various topics. The changes are effective for loan registrations on or after December 4, 2023.

 

Please review the Arc Guideline Update Summary for a side-by-side comparison of the guideline revisions, which is available HERE. As a reminder, this summary document is intended to highlight the guideline updates only; please refer to the Arc Selling Guide and product matrices for the complete Access, Elite and Foreign National program guidelines.

 

The updated program matrices will be published on the website soon – you will find Access and Foreign National HERE, and Elite HERE. The revised Arc Underwriting Guide is available within the SPARC portal HERE.

 

Appraisal Valuation Requirements

Effective for loan registrations on or after December 4, 2023, the Arc Home Appraisal Valuation Requirements policy was updated as noted below. The revised Arc Home Appraisal Valuation Requirements policy will be published on the website soon.

 

Appraisal Valuation Requirements

Topic

Products

Previous Guideline

New Guideline

Appraisal Checklist

·     Fannie Mae

·     Freddie Mac

·     Conventional Investment Property

·     FNMA/FHLMC Second Home & Investment Property

·     Access NQM

·     Edge NQM

·     Elite QM

·     Foreign National

All appraisals must include a successful Submission Summary Report (SSR).

All appraisals must include a successful Submission Summary Report (SSR).

 

Delegated Correspondents must reconcile any warnings from the Fannie Mae Collateral Underwriter (CU)/Freddie Mac Loan Collateral Advisor (LCA) on the 1008.

Appraisal Requirements

·     Access NQM

·     Edge NQM

·     Elite QM

·     Foreign National

All appraisals must be submitted to Fannie Mae’s Collateral Underwriter (SSR).

All appraisals must be submitted to Fannie Mae’s Collateral Underwriter (SSR).

 

For Delegated Correspondents, if an SSR score cannot be obtained, then a CDA from Clear Capital is required. If an SSR is obtained, any warnings from the Collateral Underwriter (CU) must be reconciled on the 1008.

·     Conventional Investment Property

·     FNMA/FHLMC Second Home & Investment Property

·     Access NQM

·     Edge NQM

·     Elite QM

·     Foreign National

An Arc Home Loan Collateral review is required on transferred appraisals, declining markets or when the SSR score is >/= 3.5 or no score is returned.

 

A third-party review is required when the appraisal is marked as a declining market or when no SSR score is returned.

An Arc Home Loan Collateral review is required on transferred appraisals, declining markets or when the SSR score is >/= 3.5 or no score is returned.

 

A third-party review is required when the appraisal is marked as a declining market or when no SSR score is returned.

 

For Delegated Correspondents, an Arc Home Collateral Review and third-party review are not required on any appraisal, regardless of SSR score, declining market, or if the appraisal is transferred.

Automated Valuation Model (AVM)

·     Conventional Investment Property

·     FNMA/FHLMC Second Home & Investment Property

If a PIW/ACE (with or without a PDR) is utilized, an AVM must also be ordered and must not be more than 10% below the appraised value utilized on the AUS findings. If the AVM is more than 10% below the appraised value, then an appraisal is required, and the collateral waterfall must be followed.

 

The AVM must be ordered from one of these approved vendors:

·     Black Knight Collateral Analytics

·     Clear Capital

·     CoreLogic

·     Freddie Mac Home Value Explorer (HVE)

·     Red Bell Real Estate, LLC

·     House Canary

·     Veros

If a PIW/ACE (with or without a PDR) is utilized, an AVM must also be ordered. The AVM must have a minimum Forecast Standard Deviation Score (FSD) per the below list AND the value must not be more than 10% below the appraised value utilized on the AUS findings. If the AVM is more than 10% below the appraised value, then an appraisal is required, and the collateral waterfall must be followed.

 

The AVM must be ordered from one of these approved vendors:

·     Black Knight Collateral Analytics – FSD < 0.26

·     Clear Capital – FSD < 0.13

·     CoreLogic – FSD < 0.22

·     Freddie Mac Home Value Explorer (HVE) – High confidence level

·     Homegenius Real Estate/Red Bell Real Estate, LLC – FSD < 0.17

·     House Canary – FSD < 0.14

·     Veros/Vero Value – FSD < 0.16

 

 

 

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