source:
  type: guide
  id: fnma-sel-b4-1.4-09
  authority: Fannie Mae Selling Guide B4-1.4-09 — Special Assessment or Community
    Facilities Districts Appraisal Requirements
  description: Fannie Mae Selling Guide B4-1.4-09 — Special Assessment or Community
    Facilities Districts Appraisal Requirements.
  coverage_tier: operative
obligations:
- id: fnma-sel-b4-1.4-09-full
  canonical_id: fnma-sel-b4-1.4-09-full
  section: Fannie Mae Selling Guide B4-1.4-09 — Special Assessment or Community Facilities
    Districts Appraisal Requirements
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B4-1.4-09 — Special Assessment or Community
      Facilities Districts Appraisal Requirements
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'B4-1.4-09, Special Assessment or Community Facilities Districts
      Appraisal Requirements (06/04/2025) Introduction This topic contains information
      on special appraisal considerations for properties in special assessment or
      community facilities districts, including: Overview Lender Responsibilities
      Related to Special Assessment or Community Facilities Districts Special Assessment
      Districts Appraisal Requirements for Properties Located in Special Assessment
      Districts Community Facilities Districts Appraisal Requirements for Properties
      Located in Community Facilities Districts Uniform Appraisal Dataset (UAD) 3.6
      Policy Overview Alternative methods for raising the capital necessary to satisfy
      utility and infrastructure requirements are sometimes used in the development
      of new residential communities. In some instances, this involves the creation
      of local districts called special assessment districts or community facilities
      districts that have the authority to assess homeowners for the cost of developing
      utility services and various infrastructure facilities, including, but not limited
      to, roads, sewer services, schools, police and ﬁre protection services, and
      libraries. Lender Responsibilities Related to Special Assessment or Community
      Facilities Published May 6, 2026 612 Districts Fannie Mae expects the lender
      to know if a property is located in one of these districts and to be aware of
      the eﬀect that assessments levied by the district could have on property values
      and the marketability of the subject property. The lender’s appraiser, therefore,
      must give special consideration to the valuation of properties located in these
      districts. Special Assessment Districts Special assessment districts, also called
      special tax districts or municipal utility districts, provide a speciﬁc service
      to homeowners living in a designated area. They are most often established to
      provide water or other utilities in areas that are not served by existing city
      or municipal utility services. The need for these districts arises when an existing
      utility service does not have suﬃcient capacity, or may not ﬁnd it economically
      feasible to provide services for newly created subdivisions that are located
      beyond its current operating area. State law governing the establishment of
      special assessment districts varies greatly, as does the ﬁnancial strength of
      the individual districts. These districts are granted the authority to assess
      owners of properties within their boundaries for funds that will be used to
      cover their operating costs and debt service. Special assessment districts that
      are established to serve newly developing subdivisions with utilities often
      base their ﬁnancial plans and the amount of the assessment to be charged to
      each property owner on the expected number of properties in the area to be served.
      The district then depends on the continuation of development to maintain its
      budget expectations. If, for any reason, development stops short of the degree
      of development that the district anticipated in preparing its budget, the district
      can become ﬁnancially distressed and may need to impose an additional assessment
      on the existing homeowners. Appraisal Requirements for Properties Located in
      Special Assessment Districts The appraisal requirements for properties located
      in special assessment districts must report any special assessments that aﬀect
      the property, and note in the appraisal report if the special assessment district
      is experiencing ﬁnancial diﬃculty and that the diﬃculty has an eﬀect on the
      value or marketability of the subject property. To ensure that the reaction
      of the market to the potential liabilities that may arise within a ﬁnancially
      troubled special assessment district is reﬂected in their analysis, the appraiser
      must consider current and expired listings or properties for sale within the
      district and any pending contract sales and recent closed sales within the district.
      There may be some instances in which the ﬁnancial diﬃculty of a special assessment
      district is so severe that its actual eﬀect on the value and marketability of
      a property is not measurable because there is no comparable market data available
      to enable the appraiser to arrive at a reliable opinion of market value. When
      this is the case, a mortgage secured by a property in that district will not
      be eligible for delivery to Fannie Mae until such time that an active market
      develops that will enable the appraiser to demonstrate the value and marketability
      of the subject property. Community Facilities Districts Published May 6, 2026
      613 Some jurisdictions have passed legislation that creates community facilities
      districts and permits them to levy a special tax to fund the capital costs of
      a wide variety of public improvements, as well as the ongoing operation and
      maintenance costs of a limited number of public services. Proceeds from the
      special tax are used to support the sale of tax-exempt bonds for the various
      capital improvements that are allowed under the legislation, including but not
      limited to, roads, sewer services, schools, police and ﬁre protection services,
      and libraries. The assessment that will be used to repay the tax-exempt bonds
      becomes an ongoing responsibility of the property owner, similar to state and
      local property taxes. The assessment lien and the obligation to pay the assessment
      passes with the title to the property when ownership of the property is transferred.
      Such legislation generally requires full disclosure of the special assessment
      to any purchaser of a property located in a community facilities district. Therefore,
      a lender originating mortgages in community facilities districts should disclose
      to the appraiser any information that it becomes aware of regarding special
      assessments on a given property. Appraisal Requirements for Properties Located
      in Community Facilities Districts Appraisers must be aware of whether the subject
      property and the comparables are located within or aﬀected by a community facilities
      district because properties subject to an assessment by one of these districts
      often compete against properties that are either subject to a signiﬁcantly diﬀerent
      assessment or no assessment at all. Appraisers must consider the reaction of
      the market, if any, to the assessment for the applicable community facilities
      district by analyzing similarly aﬀected comparable sales in their analysis,
      and should note the eﬀect of the assessment in the appraisal report. Uniform
      Appraisal Dataset (UAD) 3.6 Policy Lenders using UAD 3.6 must follow the requirements
      in the UAD 3.6 Policy Supplement. Recent Related Announcements The table below
      provides references to recently issued Announcements that are related to this
      topic. Announcements Issue Date Announcement SEL-2025-04 June 04, 2025'
  judgment: false
