Step 1: Lender Provides Borrower with Necessary Forms and Obtains Signatures

Lender
  • Form 1010A (Environmental Disclosure) is always required.
  • Form 1020 (Agricultural Water Questionnaire) is only required if property includes irrigation or drainage conditions.
  • Form(s) must be completed and executed by the Borrower before the Lender engages an Appraiser.

Step 2: Lender Secures an Appraiser and Provides Signed Forms

Lender Appraiser
  • Lender engages an Appraiser to create an Appraisal Report.
    • The Appraiser must be a State Certified General Appraiser.
      • (A State Certified Residential Appraiser is acceptable if the highest and best use of the proposed security is a rural residential use property AND the property is improved with an existing residence with significant contributory value).
    • Farmer Mac offers a Preferred Appraiser List, but a Lender may select any eligible Appraiser.
  • If Lender does not already have an established Appraisal Engagement Letter, refer to 1023A, Sample Engagement Letter, for a template.
  • Lender provides complete and fully-executed Form 1010A and (if applicable) Form 1020 to Appraiser.

Step 3: Lender and Appraiser Review the Appraisal Process

Lender Appraiser
  • The Collateral Valuation Supplement provides details on Farmer Mac’s appraisal standards, process, and guidelines.
    • Lender is responsible for ensuring that the appraisal is conducted in accordance with Farmer Mac requirements.
    • The Collateral Valuation Supplement can be found in the Training Kit located within the Resource Library of Farmer Mac’s customer portal, eFarmerMac.com.
  • Farmer Mac’s Checklist provides a quick way for all parties to check that an Appraisal Report includes all necessary documents and certification statements.
  • The Appraisal Report Content Requirements (1027A) defines the scope of work and expectations for the appraisal report content.
    • The 1027A is not required in the final report but is useful for document preparation.

Step 4: Appraiser Completes Required Forms (If Applicable)

Appraiser
  • Appraiser completes the following forms for inclusion in the Appraisal Report:
    • Form 1027B – Value Allocation Table (required if the property includes permanent plantings and/or structural improvements).
    • Form 1037 – Assumptions and Limiting Conditions.
  • Form 1037B – Assumptions and Limiting Conditions Agreement (required if the report includes Assumptions and Limiting Conditions in addition to Form 1037).

Step 5: Appraiser Creates an Appraisal Report and Sends to Lender

Appraiser
  • Appraiser creates an Appraisal Report, which should include all required forms and required statements. Please reference the Checklist.

Step 6: Lender Reviews and Uploads the Appraisal Report to Farmer Mac’s loan system (AgPower or AgXpress) on eFarmerMac.com

Lender
  • Lender should review the Appraisal Report to ensure its accuracy and completion and that all forms are included, and the report is complete. See Checklist.
  • The report date of value must be 365 days prior to the loan purchase date.
  • Once the Lender uploads and submits the complete Appraisal Report with all necessary forms and requirements to Farmer Mac (via AgPower or AgXpress), it will be assigned for review by a Farmer Mac team member. Forms should not be submitted separately.

Important Reminders

– If an Income Approach is not completed in an appraisal, the property’s income-producing capacity must be addressed in either the highest and best use or a separate section of the report.

– The Certification page of the Appraisal Report must include the following statements:

  • I am aware of the requirements stated in the Farmer Mac Seller/Servicer Guide and have completed this assignment in accordance with those requirements as they applied in this assignment.
  • My analyses, opinions, and conclusions were developed and the appraisal, and this report, has been prepared for use in a lending transaction that may include Farmer Mac as an intended user.

– Lenders are encouraged to forward the Preliminary Title Report to the Appraiser as soon as the document is available during the appraisal process. Appraisers are asked to review the document for the vesting, any exceptions that may impact value, and to confirm and include the legal description from the Preliminary Title Report in the Appraisal Report. Verification of the legal description, vesting, and a review of the exceptions by the appraiser go a long way to shortening the time required in loan processing.

Helpful Documents

1027A (Appraisal Report Content Requirements) – for Appraisers.
This document defines the scope of work and expectations for the appraisal report content. It is not required in the report but serves as a perfect tool for report preparation.

Checklist – for Lenders and Appraisers.
Before submitting an Appraisal Report (and forms) to Farmer Mac, be sure to review this checklist to ensure all required materials are included.

Collateral Valuation Supplement – for Lenders.
This helpful supplement provides details on Farmer Mac appraisal standards and guidelines. The Lender (Appraiser’s Client) is responsible for ensuring that the appraisal is conducted in accordance with Farmer Mac requirements. This document is available for Lenders in the Resource Library at eFarmerMac.com.

Tips for Avoiding Report Revisions – for Appraisers.
This document outlines the most common report deficiencies that require revisions and solutions on how to avoid them.

1023A (Sample Engagement Letter) – for Lenders.
This template can be used by lenders looking to create an Engagement Letter for securing an Appraiser.