Appraisers Need to Protect Themselves Amid Increased Requests for Form 1007/1000

The Appraisal Institute on Dec. 13 said it is aware of a reported uptick in lender requests for appraisers to complete Form 1007/1000 Single Family Rent Schedule, assignments that are intended to support a loan application or be layered on top of work prepared by others. The requests may be the result of consumers increasingly using rental income to qualify for a mortgage for a second home while maintaining ownership of a primary residence.

Such requests can be tricky for appraisers because Form 1007/1000 as a standalone document faces compliance challenges with the Uniform Standards of Professional Appraisal Practice because appraisers are still required to identify the property and provide site analysis, improvement analysis and market conditions analysis and cite highest and best use assumptions. The form is set up for an opinion of market value and cannot be modified, and many appraisers may be completing it as a standalone item without recognizing the USPAP compliance obligations.

A potential best practice is for appraisers to complete Form 1007/1000 and create a report to address USPAP and secondary market requirements, such as adherence to quality and condition ratings and to develop a scope of work commensurate with these obligations.