Fannie Mae and Freddie Mac Require Appraisal Illustrations for Adjustments

The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation—commonly known as Fannie Mae and Freddie Mac—are updating their appraisal guidelines to standardize how appraisers analyze and report on real estate markets.

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On February 4, 2025, Fannie Mae and Freddie Mac will require real estate appraisers to support their adjustments by providing an illustration of their methodology. The goal is to make the appraisal process more accountable, transparent, and consistent—especially when it comes to understanding how market conditions affect home values over time.

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Let’s explore the latest requirements from Fannie Mae and Freddie Mac. 

Fannie Mae and Freddie Mac Illustration Requirements for Appraisal Adjustment Support

The Fannie Mae and Freddie Mac updates—announced November 6, 2024—require appraisers to:

• Use comparable sales within a 12-month period to analyze overall market trends.
• Recognize that the general market trend may not apply uniformly to each comparable sale.
• Show a clear, visual illustration (like a chart or graph) explaining how they calculated any adjustments for time-related changes in the market value of comparable properties.
• Provide an analysis that supports both the broader market trend and any specific time adjustments applied to individual comparable sales.

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Here’s an illustration example Fannie Mae provides that satisfies the new requirements:

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Creating these illustrations and meeting adjustment support standards will require appraisal software and tools. Fortunately, that’s something we here at Reverified understand very well.

Synapse: Bulletproof Appraiser Adjustment Support

Appraisal software is something Reverified understands very well. Since Reverified is part of True Footage—one of the largest real estate appraisal firms in the United States—we keenly understand property valuation technology. That’s why we offer appraiser tools like Spark and Synapse.

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Synapse is built by appraisers for appraisers to help you determine and defend your adjustments.

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Here’s why Synapse is a great adjustment support tool:

1. Synapse saves you time by streamlining the adjustment process and completing calculations quickly. This empowers appraisers to focus on what matters most: Expertise and insights.
2. Synapse helps appraisers meet requirements by making complex analysis quick and simple. Adjustment support is just another part of the process, and Synapse makes it simple, straightforward, and clean by providing easy-to-customize graphs and visuals.
3. Synapse minimizes the risk of each decision by providing robust and defensible adjustment support. Quickly generate USPAP-compliant cost approach valuations with fully editable and customizable commentary drafted and updated as you complete your adjustments.
4. Synapse data exports include the appraisal methods used, commentary supporting the adjustments, and an explanation of each method used. Appraisals completed with the help of Synapse are defensible and data-supported.
5. Synapse works for you, not the other way around. Synapse does not tell you what an adjustment should be. It calculates and shows you the results based on your settings, so you can determine the adjustment.

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Regulators, government-sponsored enterprises, appraisal boards, and even some clients require you to show your work. Synapse makes it easy.

Real Estate Appraisal Tools for a Changing Industry

The requirements and expectations for real estate appraisers are changing. That much is obvious. But the common throughline is a desire for more transparency and accountability in home valuations, including both the adjustments and the process to get there.

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Real estate appraisal software like Synapse can help appraisers make more defensible and data-driven adjustments while keeping the power and expertise in appraisers’ hands.

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Are you ready to meet the opportunities of a changing industry head-on? Sign up for a two-week free trial Synapse or request a free demo!