Under Fannie Mae's Selling Guide, a comparable needs market-supported gross adjustments equal to 32% of its sale price. How does the Guide treat that percentage?
Correct Answer
A) No specific net or gross limit applies; adjustment size is not the sole test of acceptability.
Fannie Mae's Selling Guide states that it has no specific limitations or guidelines for net or gross adjustments, and that the number or amount of adjustments must not be the sole determinant of a comparable's acceptability. The 25% gross and 15% net figures are old rules of thumb, not current Fannie Mae limits, and the Guide does not require such a sale to be given the least weight. The appraiser still judges comparability and the market support for the adjustments when weighting the sale.
Why This Is the Correct Answer
Option A is correct because the Selling Guide says Fannie Mae has no specific limitations or guidelines for net or gross adjustments. It adds that the number or amount of dollar adjustments must not be the sole determinant of whether a comparable is acceptable, so a 32% gross figure is weighed with the other evidence.
Why the Other Options Are Wrong
Option B: It exceeds a 25% gross adjustment guideline, so the sale must be replaced with another sale.
Option B relies on a 25% gross adjustment guideline that Fannie Mae does not impose. The Guide states it has no specific net or gross limits, so a 32% gross figure does not by itself require replacing the sale.
Option C: It is acceptable provided the net adjustment stays below 15% of the comparable sale price.
Option C makes acceptability turn on a 15% net adjustment limit, which is not a Fannie Mae rule. Acceptability depends on comparability and market-supported adjustments, not on a net percentage cutoff.
Option D: It must be disclosed, and the sale must then receive the least weight among the comparables.
Option D imposes a fixed consequence, least weight, that the Guide does not state. The appraiser decides the weight from the overall comparability and support of the adjustments, which may or may not place this sale last.
Size flags, it does not fail
A big adjustment percentage raises a flag to check comparability and support. It does not fail the sale on its own.
How to use: Use this when an answer choice cites a 15% net or 25% gross limit as a Fannie Mae rule.
Exam Tip
Treat 15% net and 25% gross as historical rules of thumb, not current Fannie Mae limits.
Common Mistakes to Avoid
- -Treating 15% net and 25% gross as current Fannie Mae limits
- -Discarding a well-supported sale because of its adjustment percentage alone
Concept Deep Dive
Analysis
The question tests whether candidates know that Fannie Mae dropped fixed net and gross adjustment limits. A large gross percentage is a signal to look harder at comparability and support, not a rule that disqualifies the sale or dictates its weight.
Background Knowledge
For many years appraisers worked to informal limits of about 15% net and 25% gross adjustment. Fannie Mae now states it has no such limits and expects adjustments to reflect the market reaction to differences, without arbitrary caps on their size.
Real-World Application
A rural appraisal uses the best available sales, one of which needs a 32% gross adjustment because no closer sale exists. The appraiser documents the market support for each adjustment and explains how much weight the sale received.
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