A quick lexicon for understanding what the heck appraisers are saying

Maybe you’ve read an appraisal lately and felt confused with some of the lingo. You’re not alone because it’s not easy to unpack how appraiser’s describe properties these days ever since Fannie Mae created uniform code to be used by all appraisers. These codes are used for most loan appraisals, but thankfully they’re not included for private appraisals for divorce, IRS, tax appeals, etc… Anyway, here is a quick tour. Let me know if you have any questions.

Examples of Fannie Mae appraisal jargon:

Garage:

• 3ga3dw: This means “3 car garage and 3 car driveway”
• 1ga2dw: This means “1 car garage with and 2 car driveway”
• You probably picked up that “ga” means “garage” and “dw” means driveway”

Design/Style:

• DT1; Craftsman: The “DT” stands for “detached” and the “1” stands for “single story”. The design of this house is “Craftsman”. This code is used to describe a single story craftsman home.
• DT2; Colonial: The “DT” stands for “detached” and “2” stands for “2 stories”. The design of this house is “Colonial”. This code is used to describe a 2-story detached colonial home.

Condition:

Instead of simply saying a property is in “average” or “good” condition, appraisers using Fannie Mae forms now use one of the following codes to describe both the subject property and comparable sales.

NOTE: You want your property to have any condition from C1 to C4. A C5 or C6 condition can definitely presents some issues for the loan.

• C1: The improvements have been very recently constructed and have not previously been occupied. The entire structure and all components are new and the dwelling features no physical depreciation.
• C2: The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. Dwellings in this category either are almost new or have been recently completely renovated and are similar in condition to new construction.
• C3: The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well maintained.
• C4: The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building components have been adequately maintained and are functionally adequate.
• C5: The improvements feature obvious deferred maintenance and are in need of some significant repairs. Some building components need repairs, rehabilitation, or updating. The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains useable and functional as a residence.
• C6: The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety, soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many or most major components.

Lastly, here are some common abbreviations used by appraisers:

I hope this was helpful.

By the way, a significant chunk of my appraisal work actually does not use any of these codes (thankfully). I enjoy doing appraisals in the Sacramento area for estate settlement, pre-list, divorce, tax grievances and other private matters. I wanted to mention this since sometimes real estate contacts think they can’t refer business my way since they cannot choose me for their loan appraisals.

Questions: Any questions or further insight? By the way, why do you think Fannie Mae instituted this code? Comments are welcome below.

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