Property Valuation
In Minnesota, an appraisal report that meets USPAP requirements for mortgage lending purposes is typically presented as a(n):
AInformal letter of opinion
BUniform Residential Appraisal Report (URAR/Fannie Mae Form 1004)✓ Correct
CCounty assessor's field card
DCompetitive market analysis (CMA)
Explanation
Most residential mortgage appraisals in Minnesota use the Uniform Residential Appraisal Report (URAR), also known as Fannie Mae Form 1004. This standardized form is required by Fannie Mae, Freddie Mac, FHA, VA, and most conventional lenders for single-family mortgage appraisals.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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