Under Fannie Mae and Freddie Mac guidelines, what is the maximum gross adjustment allowed for any one comparable sale?

The maximum gross adjustment allowed for any one comparable sale under Fannie Mae and Freddie Mac guidelines is 25%. This standard is set to ensure that appraisers do not make excessive adjustments that could lead to inaccurate property valuations. Adjustments are made to account for differences between the subject property and comparable properties, and maintaining this limit helps to create a more reliable and accurately supported appraisal.

Applying a stringent cap like 25% also protects lenders and borrowers by fostering consistency in the appraisal process, thereby minimizing the risk of inflated property values. In practical terms, this means that if a property being appraised has notable differences compared to the comparables being used for assessment—such as size, condition, or location—the appraiser must ensure that the total adjustments for these differences do not exceed this percentage threshold. This approach ultimately contributes to a more stable and transparent real estate market.