Appraisers say new rules will cause confusion

New guidelines aimed at standardizing the way home appraisals are conducted will result in confusion, delays, and higher costs in an already vulnerable housing market, according to many home-appraisal professionals.

The changes, which take effect today, are being required by mortgage giants Fannie Mae and Freddie Mac. Under the new rules, appraisers must use a set of abbreviations to describe homes, and rate conditions through a system of numbers and letters. Some appraisers say the new format will be difficult for home buyers and sellers to understand.

Real estate agents also must provide more information to appraisers, including whether kitchens and bathrooms have been remodeled, and when the work was done.

Because most lenders eventually sell their mortgages to quasi-government mortgage agencies, primarily Fannie Mae and Freddie Mac, the new requirements will affect the majority of housing sales.

Stephen E. Sousa, executive vice president of the Dedham-based Massachusetts Board of Real Estate Appraisers, praised the effort to standardize the way appraisals are written, saying they are too often subjective and inconsistent. But Sousa said he is worried that there is too little public awareness about the changes as well as problems with computer software set up to collect the reports, which could cause havoc in the housing industry.

“The whole real estate profession is ill prepared for this,’’ said Sousa. “It is going to create a lot more confusion.’’

The Massachusetts association joined the National Association of Independent Fee Appraisers in Illinois in urging the Federal Housing Finance Agency – which regulates Fannie Mae and Freddie Mac – to postpone the implementation of the new guidelines until later this year. The Federal Housing Administration also is incorporating the changes, but won’t implement them until Jan. 1.

A Federal Housing Finance Agency official said yesterday that there were no plans to delay the new system, but that the agency would continue to offer assistance to anyone with questions about the changes.

Officials from Fannie Mae and Freddie Mac declined to comment.

The new rules will largely change appraisals from a narrative form to a list of codes. For instance, appraisers will be required to use abbreviations such as “AdjPrk’’ for “adjacent to park ’’ or “Wtr’’ for “water view.’’

Property conditions will be rated on a scale of 1 to 6, from new construction to buildings with “substantial damage’’ and defects. Quality also will be ranked from 1 to 6, with the top rating usually including architect-designed properties and the lowest level reserved for those lacking even plumbing or electrical outlets.