source:
  type: guide
  id: fnma-sel-b4-1.3-04
  authority: Fannie Mae Selling Guide B4-1.3-04 — Site Section of the Appraisal Report
  description: Fannie Mae Selling Guide B4-1.3-04 — Site Section of the Appraisal
    Report.
  coverage_tier: operative
obligations:
- id: fnma-sel-b4-1.3-04-full
  canonical_id: fnma-sel-b4-1.3-04-full
  section: Fannie Mae Selling Guide B4-1.3-04 — Site Section of the Appraisal Report
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B4-1.3-04 — Site Section of the Appraisal
      Report
    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: 'B4-1.3-04, Site Section of the Appraisal Report (06/04/2025)
      Introduction This topic contains information on reviewing the Site section of
      the appraisal report form, including: Overview Site Analysis Subject Property
      Zoning Highest and Best Use Adjoining Properties Site Utilities Oﬀ-Site Improvements
      Community-Owned or Privately Maintained Streets Special Flood Hazard Areas Uniform
      Appraisal Dataset (UAD) 3.6 Policy Overview The property site should be of a
      size, shape, and topography that is generally conforming and acceptable in the
      market area. It must also have competitive utilities, street improvements, adequate
      vehicular access, and other amenities (see Property Requirements in B2-3-01,
      General Property Eligibility for additional information). Because amenities,
      easements, and encroachments may either detract from or enhance the marketability
      of a site, the appraiser must reﬂect them in the analysis and evaluation. The
      appraiser must comment if the site has adverse conditions or if there is market
      resistance to a property because the site is not compatible with the neighborhood
      or the requirements of the competitive market, and assess the eﬀect, if any,
      on the value and marketability of the property. Site Analysis Published May
      6, 2026 560 The appraisal must include the actual size of the site and not a
      hypothetical portion of the site for the subject property. For example, the
      appraiser may not appraise only 5 acres of an unsubdivided 40–acre parcel. The
      appraised value must reﬂect the entire 40–acre parcel. Subject Property Zoning
      The appraiser must report the speciﬁc zoning class in the appraisal, along with
      a general statement as to what the zoning permits, such as one- or two-unit,
      when they indicate a speciﬁc zoning such as R-1 or R-2. The appraisal must indicate
      whether the subject property presents a legal conforming use, a legal non-conforming
      (grandfathered) use, an illegal use under the zoning regulations, or no local
      zoning. Fannie Mae only purchases or securitizes loans on properties if the
      improvements constitute a legal conforming use of the land. However, Fannie
      Mae will purchase or securitize a loan for a property that constitutes a legal,
      nonconforming use of the land provided that the appraisal analysis reﬂects any
      adverse eﬀect that the nonconforming use has on the value and the marketability
      of the property. This requirement applies to all property types. Fannie Mae
      will not purchase or securitize a loan secured by a property that is subject
      to certain land-use regulations, such as coastal tideland or wetland laws, that
      create setback lines or other provisions that prevent the reconstruction or
      maintenance of the property improvements if they are damaged or destroyed. The
      intent of these types of land-use regulations is to remove existing land uses
      and to stop land development, including the maintenance or construction of seawalls,
      within speciﬁc setback lines. For information regarding accessory dwelling units
      that comply or do not comply with zoning, see B4-1.3-05, Improvements Section
      of the Appraisal Report. Highest and Best Use Fannie Mae will only purchase
      or securitize a loan that represents the highest and best use of the site as
      improved. If the current improvements clearly do not represent the highest and
      best use of the site as an improved site, it must be indicated on the appraisal
      report. The appraiser determines highest and best use of a site as the reasonable
      and probable use that supports the highest present value on the eﬀective date
      of the appraisal. For improvements to represent the highest and best use of
      a site, they must be legally permitted, ﬁnancially feasible, and physically
      possible, and must provide more proﬁt than any other use of the site would generate.
      All of those criteria must be met if the improvements are to be considered as
      the highest and best use of a site. The appraiser’s highest and best use analysis
      of the subject property should consider the property as it is improved. This
      treatment recognizes the existing improvements should continue in use until
      it is ﬁnancially feasible to remove the dwelling and build a new one, or to
      renovate the existing dwelling. If the use of comparable sales demonstrates
      that the improvements are reasonably typical and compatible with market demand
      for the neighborhood, and the present improvements contribute to the value of
      the subject property so that its value is greater than the estimated vacant
      site value, the appraiser should consider the existing use as Published May
      6, 2026 561 reasonable and report it as the highest and best use. Adjoining
      Properties The appraiser must consider the present or anticipated use of any
      adjoining property that may adversely aﬀect the value or marketability of the
      subject property. Site Utilities For loans to be eligible for purchase or securitization,
      the utilities of the property must meet community standards. If public sewer
      and/or water facilities, those that are supplied and regulated by the local
      government, are not available, community or private well and septic facilities
      must be available and utilized by the subject property. The owners of the subject
      property must have the right to access those facilities, which must be viable
      on an ongoing basis. Private well or septic facilities must be located on the
      subject site, unless the subject property has the right to access oﬀ-site private
      facilities and there is an adequate, legally binding agreement for access and
      maintenance. If there is market resistance to an area because of environmental
      hazards or any other conditions that aﬀect well, septic, or public water facilities,
      the appraisal must address the eﬀect of the hazards on the value and marketability
      of the subject property (see B4-1.4-08, Environmental Hazards Appraisal Requirements).
      Oﬀ-Site Improvements Oﬀ-site improvements include, but are not limited to, streets,
      alleys, sidewalks, curbs and gutters, and street lights. The subject property
      should front on a publicly dedicated and maintained street that meets community
      standards and is generally accepted by area residents. If a property fronts
      on a street that is not typical of those found in the community, the appraiser
      must address the eﬀect of that location on the value and marketability of the
      subject property. The presence of sidewalks, curbs and gutters, street lights,
      and alleys depends on local custom. If they are typical in the community, they
      should be present on the subject site. The appraiser must comment on any adverse
      conditions and address their eﬀect on the value and marketability of the subject
      property. Community-Owned or Privately Maintained Streets If the property is
      located on a community-owned or privately-owned and maintained street, an adequate,
      legally enforceable agreement or covenant for maintenance of the street is required.
      The agreement or covenant should include the following provisions and be recorded
      in the land records of the appropriate jurisdiction: responsibility for payment
      of repairs, including each party’s representative share; default remedies in
      the event a party to the agreement or covenant fails to comply with their obligations;
      and the eﬀective term of the agreement or covenant, which in most cases should
      be perpetual and binding on any future owners. Published May 6, 2026 562 Note:
      If the property is located within a state that has statutory provisions that
      deﬁne the responsibilities of property owners for the maintenance and repair
      of a private street, no separate agreement or covenant is required. If the property
      is not located in a state that imposes statutory requirements for maintenance,
      and either there is no agreement or covenant for maintenance of the street,
      or an agreement or covenant exists but does not meet the requirements listed
      above, the lender may still sell the loan. However, the lender is required to
      indemnify Fannie Mae (as described in A2-1-03, Indemniﬁcation for Losses) against
      all losses incurred by Fannie Mae as a result of the physical condition of the
      street or in order to establish and/or retain access to the street. Special
      Flood Hazard Areas Fannie Mae’s appraisal report forms provide an area for the
      appraiser to indicate whether the property is located in a Special Flood Hazard
      Area that is identiﬁed on the Federal Emergency Management Agency’s (FEMA) Flood
      Insurance Rate Maps. The appraiser must also indicate the speciﬁc FEMA ﬂood
      zone and the map number and its eﬀective date. For additional information concerning
      Fannie Mae’s policies on ﬂood insurance, see B7-3-06, Flood Insurance Requirements
      for All Property Types. 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 the Announcements
      that have been issued that are related to this topic. Announcements Issue Date
      Announcement SEL-2025-04 June 04, 2025'
  judgment: false
