Which data sources does Fannie Mae list as supporting the property value trend reported in the neighborhood section?
Correct Answer
C) Market data, price indices, MLS and public records
The trend analysis must include factual data from sources such as market data, home price indices, multiple listing services, public records and models, based on at least 12 months of data.
Why This Is the Correct Answer
Option C is correct because Fannie Mae states that the trend analysis (increasing, stable, declining) must include factual data from sources such as market data, home price indices, multiple listing services, public records and models. These are objective market sources. They let the appraiser support the trend rather than assert it.
Why the Other Options Are Wrong
Option A: The appraiser’s personal impressions of the area
Option A, the appraiser's personal impressions of the area, is not factual data. Fannie Mae requires the trend to be supported by market data sources.
Option B: Interviews with the borrower and the seller
Option B, interviews with the borrower and the seller, relies on parties with an interest in the transaction. Their views are not the factual market sources Fannie Mae lists.
Option D: The lender’s internal loan pricing information
Option D, the lender's internal loan pricing information, concerns loan terms, not property value trends. It is not among the data sources Fannie Mae lists for the trend.
Trends Need Data, Not Feelings
A value trend is a data claim, so it comes from data sources: market data, price indices, MLS, public records and models.
How to use: Use this to reject answers that support a market trend with opinions or interested parties.
Exam Tip
On Fannie Mae support questions, look for the option naming objective, verifiable market sources.
Common Mistakes to Avoid
- -Reporting a value trend based only on general impressions
- -Relying on statements from the buyer or seller as trend evidence
- -Leaving the trend selection without factual support
Concept Deep Dive
Analysis
This question tests what kind of evidence Fannie Mae expects behind the property value trend reported in the neighborhood section. The Selling Guide requires factual data from information sources such as market data, home price indices, MLS, public records and models. Answers based on impressions, interested parties or lender pricing do not meet that standard.
Background Knowledge
The neighborhood section of a residential appraisal reports whether property values are increasing, stable or declining. Fannie Mae requires that conclusion to rest on factual data from recognized sources. Supporting trends with data helps make market conditions adjustments and the overall analysis credible.
Real-World Application
An appraiser checks the box for increasing values in the neighborhood section. To support it, the appraiser cites MLS sales data and a home price index showing year-over-year gains in the subject's market.
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Several homes in a neighborhood are vacant and boarded up. Which market force does Fannie Mae classify this as?
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