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Fannie Mae Loan Appraisal Changes Coming April 1

by Kelly Leighton on

As of April 1, appraisers will be required to use the American National Standards Institute – or ANSI – Measuring Standard for measuring, calculating and reporting of above- and below-grade finished areas of properties requiring interior and exterior inspections on loans sold to Fannie Mae.

In a webinar for PAR, Michelle Czekalski Bradley, a Pennsylvania certified general appraiser and USPAP instructor, talked with PAR President Christopher Beadling about some of the forthcoming changes. One of the main ones is that finished areas must have a ceiling height of at least 7 feet. In a room with a sloping ceiling, at least 50% of the finished square footage of the room must have a ceiling height of at least 7 feet and no portion of the finished area that has a ceiling height of less than 5 feet can be included in the GLA, said Bradley.

As of now, there are no standards for how Realtors® or appraisers measure a property. “Everyone measures to a different standard,” said Bradley. “Some appraisers round to the nearest foot or inch, while others do it exactly.” However, as of April 1, measurements are to be taken to the nearest inch or tenth of a foot, and the final square footage is reported to the nearest whole square foot.

“For a cape cod-style home, it’s possible the second floor may not be able to be included in the reported above-grade finished area. In some cases, if the first level of the home is slightly below grade on any wall, your listing may have a reported above-grade finished area of 0 square feet,” said Bradley. However, Bradley said the appraiser can make a note in the sales comparison grid with the appropriate market adjustment.

Additionally, the square footage calculation does not include openings to the floor below, like two-story foyers. And a basement is considered any space that is partially or completely below grade and staircases are included in the GLA of the floor from which they descend.

Currently, only Fannie Mae is requiring this standard, but Freddie Mac has agreed to accept appraisals done in the same way. “It’s potentially a national standard for measurement for Realtors® and appraisers,” said Bradley. “They believe it should have no effect on the market value of the home.”

Fannie Mae has published additional information and frequently asked questions regarding the new requirements.

A recording of the webinar is available to view.


Appraisal Fannie Mae American National Standards Institute ANSI
Comments (2)


  • Dakota Goch    March 19, 2022 | 10:56 am

    I personally have a cape cod style home and this is concerning to me as a Realtor but also a homeowner. I do understand the purpose of having a limit on ceiling height. Our first floor is just over 7 feet. But our second floor was completely gutted and remodeled—new electrical, lighting, insulation, plaster, paint, doors, windows, etc. The max height on the second floor is 6’11” but of course it has sloped ceilings on both sides, so will that whole floor not count as livable square footage? It’s about half of our finished square footage. So is my house going to be appraised as a 1000 square foot home when in reality it’s a 1700 square foot home? How will this affect the value? Thank you!

    Reply to Dakota Goch
    • Michelle Bradley    March 23, 2022 | 3:20 pm

      Hi Dakota! Nice to chat with you again! Fannie Mae is stating this change in measurements will not necessarily change the market value opinion. There are many factors that come into play here, including market perception, ceiling height in other comparable properties, etc. The factor we don’t know yet is how LENDERS are going to perceive this change when they are underwriting a loan. The more adjustments, and the bigger the difference in reported GLA can have underwriting challenges. Keep your seatbelt on and your eyes ahead on the road because it could be a bit of a bumpy ride. 🙂

      Reply to Michelle Bradley

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