Fannie Mae Adopts ANSI Standard for Square Footage Measurements
Beginning April 1, Fannie Mae will require appraisers to report a property’s gross living area and non-gross living area for appraisals involving interior and exterior inspections by using the American National Standard for Single-Family Residential Buildings, Square Footage Method of Calculating, ANSI Z765-2021. This standard was last updated in May.
Historically, Fannie Mae’s Selling Guide has not required the use of a specific measurement standard, but this mandate will establish a standard for measuring, calculating and reporting living area. Additionally, all sketches for property footprints and floor plans must be computer-generated, indicate all dimensions necessary to calculate gross living area and other areas (such as a garage or basement) and show the calculations so it’s clear how the gross living area was tallied.
Fannie Mae hopes its new requirement will create alignment across market participants, provide a professional and defensible method for appraisers to calculate living area and allow transparent and repeatable results for the users of an appraisal report.
A significant period of transition is expected, and appraisers likely will have to do more rigorous research and analysis to comply with the new requirement. Analysis of subject properties with comparable sales information probably will not readily align with information in the MLS and tax records; a small number of MLS systems have adopted the ANSI standard.
The Appraisal Institute maintains a seminar on the ANSI standard, which has been updated to include the Z765-2021. The updated seminar is pending state approvals.