Q: Real Property Inspections. How should financial institutions respond to COVID-19 related issues relative to inspections of real property?
A: Responses to COVID-19 related questions provided by The Appraisal Foundation note that the Uniform Standards of Professional Appraisal Practice (USPAP) address situations where access to the interior of a property may not be feasible. USPAP permits an appraiser to make an extraordinary assumption about the interior of a property due to health concerns or other emergency conditions, such as the COVID-19 pandemic. Appraisers may have a variety of reasonable bases for an extraordinary assumption, including, but not limited to:
Determining an interior inspection is not needed because the appraiser has a reasonable basis for an extraordinary assumption and its use still results in a credible analysis.
Having conducted a prior inspection of the property in the recent past.
Obtaining an affidavit and/or pictures from the borrower regarding the interior.
This Q&A was contained in the Frequently Asked Questions for Financial Institutions Affected by the Coronavirus Disease 2019 (Referred to as COVID-19) – As of March 3, 2021 (which may be updated from time to time). This may be found on the FDIC’s website here: https://www.fdic.gov/Coronavirus/faq-fi.pdf.