The COVID-19 (Coronavirus) pandemic has impacted every industry across the country. Many people are being asked to shelter in place and everyone has been asked to practice social distancing to try to curtail the spread of this deadly virus.
The Federal Housing Finance Agency (FHFA) has asked both Freddie Mac and Fannie Mae to make some changes in the manner they conduct property appraisals and employment verification.
Shortly after the move by the FHFA, The Veteran’s Administration (VA) and Federal Housing Administration (FHA) followed suit by relaxing property appraisal requirements. Due to the unusual circumstances that are facing the country right now, these changes are necessary to keep people safe while minimizing the blow to the economy.
Exterior Inspection Appraisals
One of the critical parts that must happen during the purchase of a home is something called an appraisal. Typically, these appraisals involve an on-site inspection of the home, taking a close look at everything inside to try to make sure the price is as accurate as possible. Now, appraisals can be done on something that is called an exterior-only or “drive-by” basis. This means that appraisers might drive by to confirm that the property exists, but will not physically inspect it.
In some cases, they might just use the computer, find comparable properties, and appraise it in this manner. This is normally referred to as a “desktop appraisal”. This is important for everyone, including those who are Department of Veterans Affairs (VA) home loan borrowers.
Why Appraisals Are Needed Now
Even though fewer people may be currently looking at houses, there are other reasons why an appraisal might be necessary. Many people are looking for sources of emergency funding, particularly as hours get cut and people get laid off.
There are still bills that need to be paid, including utility bills and mortgages. Therefore, many people are looking at taking out a second mortgage as a source of immediate liquidity. Sometimes, an appraisal might be needed to make this happen.
Other Measures Are Being Taken By The FHFA
In addition to the notice about drive-by appraisals, the FHFA has also suspended any foreclosures and evictions in many cases. People who are facing hardship due to the pandemic can also apply for forbearance, which can take a lot of stress off of the shoulders of individuals and families.
If you have questions about your mortgage and financing options available to you during the Coronavirus pandemic, contact your trusted mortgage professional. They will be best able to analyze your personal situation and provide the most accurate feedback.