source:
  type: guide
  id: fnma-sel-b4-1.4-05
  authority: Fannie Mae Selling Guide B4-1.4-05 — Leasehold Interests Appraisal Requirements
  description: Fannie Mae Selling Guide B4-1.4-05 — Leasehold Interests Appraisal
    Requirements.
  coverage_tier: operative
obligations:
- id: fnma-sel-b4-1.4-05-full
  canonical_id: fnma-sel-b4-1.4-05-full
  section: Fannie Mae Selling Guide B4-1.4-05 — Leasehold Interests Appraisal Requirements
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B4-1.4-05 — Leasehold Interests 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: 'B4-1.4-05, Leasehold Interests Appraisal Requirements (06/04/2025)
      Introduction This topic contains information on special appraisal considerations
      for properties subject to leasehold interests, including: Overview Appraisal
      Requirements for Leasehold Interests Comparable Selection Requirements for Leasehold
      Interests Uniform Appraisal Dataset (UAD) 3.6 Policy Overview A mortgage that
      is secured by a leasehold estate or is subject to the payment of “ground rent”
      gives the borrower the right to use and occupy the real property under the provisions
      of a lease agreement or ground lease, for a stipulated period of time, as long
      as the conditions of the lease are met. When the lease holder is a community
      land trust, there may be signiﬁcant restrictions on both the purchase and resale
      of the property. For more information on appraising this type of leasehold,
      see B4-1.4-06, Community Land Trust Appraisal Requirements. Appraisal Requirements
      for Leasehold Interests The appraisal requirements for leasehold interest properties
      are as follows: Appraisers must develop a thorough, clear, and detailed narrative
      that identiﬁes the terms, restrictions, and conditions regarding lease agreements
      or ground leases and include this information as an addendum to the appraisal
      report. Appraisers must discuss what eﬀect, if any, the terms, restrictions,
      and conditions of the lease agreement or ground lease have on the value and
      marketability of the subject property. Comparable Selection Requirements for
      Leasehold Interests When there are a suﬃcient number of closed comparable property
      sales with similar leasehold interests available, the appraiser must use the
      property sales in the analysis of market value of the leasehold estate for the
      subject property. However, if not enough comparable sales with the same lease
      terms and restrictions are available, appraisers may use sales of similar properties
      with diﬀerent lease terms or, if necessary, sales of similar properties that
      were sold as fee simple estates. The appraiser must explain why the use of these
      sales is appropriate, and must make appropriate adjustments in the Sales Comparison
      Approach adjustment grid to reﬂect the market reaction to the diﬀerent lease
      terms or property rights appraised. See B4-1.3-08, Comparable Sales, for general
      requirements regarding comparable selection. Published May 6, 2026 605 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 Announcement
      SEL-2024-07 November 06, 2024'
  judgment: false
