A Fannie Mae appraisal is good for four months, measured from the appraiser’s effective date to the date you sign the mortgage note. If closing slips past that window, the lender can extend the appraisal’s usable life out to 12 months by ordering an update on Form 1004D, provided the appraiser confirms the property’s value has not declined. These timing rules live in Section B4-1.2-04 of the Fannie Mae Selling Guide, and knowing exactly how they work can keep a slow closing from turning into a new appraisal bill.1Fannie Mae. Appraisal Age and Use Requirements
The Four-Month Rule and How It’s Measured
Fannie Mae counts appraisal age from the “effective date” of the report, meaning the day the appraiser inspected the property and gathered the data, through to the date on the mortgage note. Fewer than four months between those two dates? The appraisal is current and no extra steps are needed.1Fannie Mae. Appraisal Age and Use Requirements
You’ll sometimes hear the rule described as “120 days.” The Selling Guide itself says four months, which can run a day or two off from an exact 120-day count depending on which months the window spans. Lenders generally track the deadline conservatively so there’s no argument about it at closing.
If your note date lands even one day past the four-month mark, the original appraisal by itself is no longer acceptable. From there, the lender either orders an update or, in some cases, an entirely new report.
Extending Validity With a Form 1004D Update
When the original effective date is more than four months but less than 12 months before the note date, the lender can order an appraisal update instead of a fresh report. The update is documented on the Appraisal Update and/or Completion Report, better known as Form 1004D.1Fannie Mae. Appraisal Age and Use Requirements
To complete the update, the appraiser performs at least a street-view exterior inspection and reviews current comparable sales to decide whether the property has lost value since the original report.2Reginfo.gov. Appraisal Update and/or Completion Report If the answer is no, the loan can proceed on the original value. If the appraiser concludes the value has dropped, the update can’t be used and the lender must order a new full appraisal.1Fannie Mae. Appraisal Age and Use Requirements
One timing detail catches a lot of borrowers off guard. The 1004D update itself has to happen within four months before the note date. So if the original appraisal is eight months old and you get an update, that update can’t then sit for another five months while you close. Fewer than four months have to separate the update from the note date.1Fannie Mae. Appraisal Age and Use Requirements
Who Performs the Update
The original appraiser should perform the update. Fannie Mae allows a substitute when the original appraiser isn’t available, but the substitute has to review the original report and give an opinion on whether the original value was reasonable at the time. The lender also has to document in the loan file why the original appraiser wasn’t used.1Fannie Mae. Appraisal Age and Use Requirements
Cost Compared to a New Appraisal
An appraisal update typically runs $125 to $225. A full new appraisal generally costs $450 to $650 or more depending on property type and location. Catching the timeline early enough to use a 1004D can save several hundred dollars.
Desktop Appraisals Expire Differently
Fannie Mae permits desktop appraisals for certain transactions. On a desktop, the appraiser works remotely from data, photos, and public records rather than visiting the property. These reports follow a stricter age rule: once the effective date is more than four months from the note date, a new appraisal is required. There is no Form 1004D update path for a desktop.1Fannie Mae. Appraisal Age and Use Requirements
If your loan used a desktop appraisal and closing slips past four months, the valuation starts over from scratch. Worth remembering if your lender proposes a desktop and your closing date has any wiggle in it.
When a New Appraisal Is Required
Several situations take the update path off the table and force a new report.
- The original appraisal is more than 12 months old. No 1004D can push validity past the one-year mark.1Fannie Mae. Appraisal Age and Use Requirements
- The appraiser performing the 1004D finds the property has declined in value.1Fannie Mae. Appraisal Age and Use Requirements
- The property has undergone significant remodeling, renovation, or deterioration that materially affects market value.1Fannie Mae. Appraisal Age and Use Requirements
- The property carries a condition rating of C6, which indicates severe damage or deferred maintenance affecting safety or structural integrity. The property has to be repaired and re-appraised at a minimum C5 before the loan is eligible for sale to Fannie Mae.3Fannie Mae. Property Condition and Quality of Construction of the Improvements
- A desktop appraisal has passed the four-month mark.
Where the original appraisal was written “subject to” repairs for something like fire damage, water intrusion, or an insect infestation, the lender has to document that the condition was corrected before the loan is delivered to Fannie Mae.3Fannie Mae. Property Condition and Quality of Construction of the Improvements
Construction-to-Permanent Loans
Single-close construction-to-permanent loans have their own version of the timing rules. The appraisal’s effective date has to be no more than four months before the note date of the construction loan itself. Once the home is finished, the lender obtains a completed Form 1004D that combines the appraisal update with a certification of completion confirming the home was built to the plans and specifications used in the original valuation.4Fannie Mae. Conversion of Construction-to-Permanent Financing: Single-Closing Transactions
Construction schedules routinely run longer than four months, so the completion 1004D acts as a fresh check that the finished property still supports the original value. If the finished home departs meaningfully from the plans, or the appraiser sees market decline, a new full appraisal may be required.
Reusing an Appraisal on a Later Transaction
If a loan falls apart and a new transaction starts on the same property, the original appraisal can sometimes carry over. Fannie Mae requires that the borrower and the lender be the same on both transactions, that the property not have changed materially, and that the appraisal be less than 12 months old as of the note date of the new loan.1Fannie Mae. Appraisal Age and Use Requirements If the appraisal is more than four months old at that point, a 1004D update is still required under the same rules already described.
Switching lenders generally means a new appraisal, because the borrower-and-lender match won’t be there. Federal rules allow one lender to accept another lender’s appraisal in some circumstances, but most lenders prefer to order their own.
What a Slipping Deadline Does to Your Rate Lock
Rate locks usually run 30, 45, or 60 days. If your appraisal expires and the lender has to schedule an update or a new report, the delay can push past the lock deadline.5Consumer Financial Protection Bureau. What’s a Lock-In or a Rate Lock on a Mortgage? Once the lock expires, your interest rate is no longer guaranteed.
Extending a lock costs money, either as a flat fee or a rate bump, and the longer the extension the more it costs. If your closing date is drifting toward the four-month appraisal deadline, raise it with the lender early. Getting a 1004D moving before the appraisal ages out is almost always cheaper than paying for both a rate lock extension and a brand-new report.