What do the federal and state regulations say about hybrid appraisals?

There are some common misconceptions about USPAP and requirements for appraisers:

Geographic proximity - USPAP requires geographic competency, but it does not require physical proximity. Appraisers must have, or acquire, familiarity with the market, which can be achieved through data, experience, and analysis rather than location.

Appraiser inspections - USPAP has never required an appraiser to complete an on-site inspection, and most non-agency appraisals are desktop assignments.

Appraisers must drive comps - under UAD 3.6 appraisers are no longer required ‘to inspect comparable sales from the exterior’, but can use alternate sources like MLS photos, Google street view, etc.

How hybrid appraisals mitigate these issues:

The new URAR hybrid appraisal form (1004 Hybrid/70H) scope of work and limiting conditions address these areas:

Limiting conditions - ‘the appraiser has relied on data provided by third-parties in this appraisal report. After examination of the data and data sources, the appraiser has used only the data he or she considers reliable.’

USPAP compliance - ‘I performed this appraisal in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice’

Appraiser certification - ‘I did not perform a personal visual inspection of the subject property as part of this appraisal assignment.’