Form 1004D, the Appraisal Update and/or Completion Report, is the form a lender uses to confirm one of two things before closing your mortgage: that the property’s value hasn’t dropped since the original appraisal, or that repairs and construction the original appraisal required have actually been finished. It has two separate sections for those two separate jobs, and an appraiser fills out only the part the lender asks for.
When Your Lender Will Order One
Two situations trigger a 1004D. The first is time. Under the Fannie Mae Selling Guide, an appraisal is valid for four months from its effective date. If your closing falls between four and twelve months after that date, the lender orders a 1004D update so the appraiser can check whether value has declined by reviewing recent comparable sales and inspecting the exterior. Past twelve months, an update is no longer enough and a full new appraisal is required.1Fannie Mae. Appraisal Age and Use Requirements Freddie Mac’s window is slightly tighter at 120 days before the note date.2Freddie Mac. Guide Section 5604.3 Borrowers rarely know which investor their loan is headed to, so the shorter clock can catch people off guard.
The second trigger has nothing to do with time. If the original appraisal was made “subject to” the completion of repairs, alterations, or new construction, the lender must verify the work was done before selling the loan. Typical examples are roof replacements, foundation repairs, safety railings, or an addition that was still under construction on the appraisal date.3Fannie Mae. Requirements for Verifying Completion and Postponed Improvements
FHA loans use Form 1004D in a similar way. HUD Handbook 4000.1 lists it as an acceptable way to certify that required repairs were satisfactorily completed, sometimes paired with HUD’s own compliance inspection form (HUD-92051).4U.S. Department of Housing and Urban Development. FHA Single Family Housing Policy Handbook VA loans follow a comparable process with different forms and inspection standards.
The Two Parts of the Form
The appraisal update section answers one question: has the property’s market value declined since the original appraisal? The appraiser reviews recent comparable sales, notes any market shifts, and states whether the original value opinion still holds. It’s a value check, not a physical condition check.
The completion report section answers a different question: were the specific items the original appraisal required actually finished? The appraiser confirms yes or no and supplies visual evidence. This section does not reassess value.3Fannie Mae. Requirements for Verifying Completion and Postponed Improvements
Some transactions need both, particularly when the original appraisal was subject to construction completion and enough months have passed that a value update is also due.
Who Fills It Out
Fannie Mae prefers the original appraiser complete the 1004D, but a substitute is allowed when the original one isn’t available. A substitute must review the original report and state whether the original value opinion was reasonable, and the lender has to document why the original appraiser wasn’t used.1Fannie Mae. Appraisal Age and Use Requirements
For completion verification specifically, an appraiser isn’t always necessary. Fannie Mae accepts attestation letters as an alternative in some situations. New construction can be verified by a letter signed by both the borrower and the builder certifying the property was built to plans and specifications. Repairs on an existing property can be verified by a borrower attestation letter that includes photos and either a professional’s signature or paid invoices for the work. If those signatures can’t be obtained, a Form 1004D completed by an appraiser is required instead.3Fannie Mae. Requirements for Verifying Completion and Postponed Improvements
Visual evidence on a completion report can come from an on-site visit or from alternatives like virtual inspections, digital photos, or video walkthroughs. All exhibits must be unaltered and verifiable through their metadata and the property’s geocode.3Fannie Mae. Requirements for Verifying Completion and Postponed Improvements
How It Gets Submitted and Cleared
A common misconception is that the appraiser sends the completed 1004D directly to the Uniform Collateral Data Portal. That isn’t how it works. Independent fee appraisers can’t register for UCDP access. The appraiser delivers the form to the lender or the lender’s agent, and that party submits it to the portal, receiving a Submission Summary Report with a document file ID for delivery to Fannie Mae or Freddie Mac.5Freddie Mac. Uniform Collateral Data Portal FAQ
Underwriting review typically takes one to two business days. Once the report is accepted, the outstanding appraisal condition on your file is cleared, and for many borrowers this is the last item standing between them and a “clear to close.” The completed 1004D stays in the permanent loan record for the life of the loan.
What Happens if the Value Has Dropped
If the 1004D update shows a decline in value, the lender cannot simply adjust the loan-to-value ratio and continue. Fannie Mae requires a brand-new appraisal in that situation.1Fannie Mae. Appraisal Age and Use Requirements The new appraisal produces a new value, and if that number is lower than what the loan was based on, you may face a larger down payment, a new mortgage insurance requirement, or a renegotiation of the purchase price with the seller.
If the appraiser confirms value has not declined, the loan moves forward without further fieldwork.1Fannie Mae. Appraisal Age and Use Requirements In stable or appreciating markets, that’s the usual result.
Cost and Who Pays
A 1004D inspection costs much less than a full appraisal because the appraiser isn’t starting from scratch. Fees generally run between $75 and $275, depending on the type of inspection and the local market. An exterior-only value update sits at the low end; a combined completion and value recertification with an interior visit costs more. Where permitted, virtual inspections tend to be the cheapest.
Who pays depends on the reason. Update inspections triggered by the passage of time are usually the borrower’s expense as part of closing costs. Completion inspections tied to repairs the seller agreed to make can shift to the seller under the terms of the purchase contract.
Penalties for Falsifying the Form
Because a 1004D directly influences whether a mortgage gets funded, falsifying any part of it is a federal crime. Under 18 U.S.C. § 1014, knowingly making false statements or willfully overvaluing property to influence a federally related mortgage loan is punishable by up to $1,000,000 in fines, up to 30 years in prison, or both.6Office of the Law Revision Counsel. 18 USC 1014 – Loan and Credit Applications Generally That reaches appraisers who misrepresent conditions and anyone who manipulates the photos or documentation submitted with the form. The requirement that visual exhibits carry authenticatable metadata and geocode data is what makes that kind of manipulation detectable.