source:
  type: guide
  id: fnma-sel-b4-1.4-04
  authority: Fannie Mae Selling Guide B4-1.4-04 — Co-op Appraisal Requirements
  description: Fannie Mae Selling Guide B4-1.4-04 — Co-op Appraisal Requirements.
  coverage_tier: operative
obligations:
- id: fnma-sel-b4-1.4-04-full
  canonical_id: fnma-sel-b4-1.4-04-full
  section: Fannie Mae Selling Guide B4-1.4-04 — Co-op Appraisal Requirements
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B4-1.4-04 — Co-op 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: 'B4-1.4-04, Co-op Appraisal Requirements (04/15/2014) Introduction
      This topic contains information on special appraisal considerations for units
      in co-op projects, including: Overview Appraisal Requirements for Co-op Share
      Loans Comparable Selection Requirements for Co-op Share Loans Comparable Selection
      Requirements for Co-op Share Loans in Established Projects Comparable Selection
      Requirements for Co-op Share Loans in New (or Recently Converted) Projects Overview
      A co-op corporation holds title to a co-op project and grants occupancy rights
      to particular apartments or units to shareholders through proprietary leases
      or similar arrangements. The co-op interest is the co-op shares or other evidence
      of an ownership interest in the co-op corporation and the accompanying occupancy
      rights, excluding the co-op interest’s pro rata share of the debt service of
      the blanket mortgage. In other words, the co- op interest is the equity portion
      that is over and above the pro rata share of the blanket mortgage(s). Note:
      The lender is required to receive Fannie Mae approval to deliver mortgages secured
      by units in co-op projects. Appraisal Requirements for Co-op Share Loans The
      appraisal requirements for co-op share loans are as follows: Appraisers must
      develop an opinion of the market value of the co-op interest when evaluating
      co-op units. To determine the value of the co-op interest, appraisers must consider
      and report, among other things, the following information: the number of shares
      attributable to the unit; the number of shares issued and outstanding for the
      co-op corporation; the name of the lienholder, the lien position, and the amount
      and repayment terms of all project blanket ﬁnancing; the pro rata share of the
      blanket mortgage payments that are attributable to the unit, as determined by
      dividing the number of shares attributable to the unit by the total number of
      project shares; the pro rata share of each lien that is attributable to the
      unit; any tax abatements or exemptions that are attributable to the unit; the
      remaining term for any tax abatements or exemptions and provisions for escalation
      of real estate taxes, which is the dollar amount by which the taxes will increase
      and the year in which the increase will occur; and Published May 6, 2026 602
      any monthly maintenance fees, including: utility charges, if they are part of
      these fees; monthly special assessments; ground rent; other fees for the use
      of the facilities that are attributable to the unit; and the fee type, amount,
      and term (if applicable) of those other fees. This information can be developed
      through Request for Cooperative Project Information (Form 1074), if the management
      agent, co-op board, or project sponsor/developer uses the form to respond to
      lender or appraiser inquiries for project information. When Form 1074 is used,
      appraisers may either transcribe the appropriate information to the applicable
      appraisal report or attach the form to the report as an addendum. Appraisers
      must use reliable sources to obtain data on the co-op project, the individual
      subject unit, and the comparable properties, and indicate the name of each source
      on the appraisal report or in an addendum to the appraisal report. Appraisers
      must address any factors that could result in an increase to the monthly debt
      service for the subject unit. Appraisers must indicate in the Sales Comparison
      Approach adjustment grid the dollar amount of the monthly assessments for each
      of the comparable sales. Appraisers must report the value of the co-op interest,
      excluding its pro rata share of the blanket mortgage(s). This value reﬂects
      the market value for the co-op interest of the unit. For example, when the indicated
      value of the unit encumbered by the blanket mortgage(s) is $100,000, and it’s
      pro rata share of the blanket mortgage(s) is $25,000, the value estimate that
      the appraiser must report for the co- op interest of the unit is $75,000. Appraisers
      must include a certiﬁcation in the appraisal report that the pro rata share
      of the blanket mortgage(s) on the real estate has not been included in the opinion
      of the market value of the co-op interest. Comparable Selection Requirements
      for Co-op Share Loans The comparable selection requirements for co-op share
      loans are as follows: Appraisers must comment on the acceptance of housing co-ops
      in the market area. The degree of acceptance is generally reﬂected in the availability
      of similar comparable sales data for co-op units. If there is limited market
      acceptance of the co-op form of ownership or if co-op forms of ownership are
      relatively new in the market area, appraisers must address any eﬀect that has
      on the value and marketability of the unit that is being appraised. The appraiser
      must compare the subject unit to the general market area as well as to other
      units in the subject co-op project. This comparison demonstrates market acceptance
      of co-op units in the area. Comparable sales must be from similar types of projects
      that have similar common amenities and recreational facilities including, but
      not limited to, townhouses and mid-rise and high-rise buildings. When available,
      appraisers must use sales from co-op units as comparables. However, appraisers
      may use condo units as comparable sales if co-op units are not available, as
      long as the appraiser explains Published May 6, 2026 603 why those types of
      comparables were used and adjusts the condo comparables to reﬂect the reaction
      of the market to the co-op unit when there is a preference for condo ownership
      in the subject market area. See B4-1.3-08, Comparable Sales, for general requirements
      regarding comparable selection. Comparable Selection Requirements for Co-op
      Share Loans in Established Projects Comparable sales from within the same project
      as the subject property should be used if the project has resale activity. Sales
      activity from within the project should be the best indicator of value for properties
      in that project. Note: Use of comparable sales located outside of the established
      subject neighborhood must be explained in the appraisal analysis. When the subject
      property is a unit in an established co-op project that has sales activity,
      appraisers should use the following as comparables: two closed or settled sales
      from within the subject project, if available; and one closed or settled sale
      from a competing project. See B4-1.3-08, Comparable Sales, for general requirements
      regarding comparable selection. Comparable Selection Requirements for Co-op
      Share Loans in New (or Recently Converted) Projects If the subject property
      is a unit in a new or recently converted co-op project, appraisers should select
      as comparables one closed or settled sale from the subject project, if one is
      available; and two closed or settled sales from outside of the project. If closed
      or settled sales are not available in the subject project, appraisers must use
      sales from competing projects. See B4-1.3-08, Comparable Sales, for general
      requirements regarding comparable selection. Recent Related Announcements There
      are no recently issued Announcements related to this topic. Published May 6,
      2026 604'
  judgment: false
