FNMA & FHLMC’s recent decision to require the use of the ANSI residential measuring standard will result in lower (and less accurate) value estimates for many home owners and more delay and confusion in an industry already besot with scope of work increases and lender overlays. While I am generally a big fan of standardization I believe Fannie & Freddie have made the worst possible choice for a measuring standard for one simple reason.

None of the data sources we have available to us use the ANSI standard!

ANSI is the most conservative, overprecise and time consuming method they could possibly have chosen. It is designed by and for engineers and architects, did not exist prior to about 1997 and is not similar to the standard(s) used by local tax assessors, realtors or buyers & sellers in Illinois and the rest of the country. Its requirement for subject living area forces the appraiser to choose between using two incompatible standards (giving potentially lower value estimates) or trying to convert (guesstimate) assessor’s living area estimates to ANSI for each comparable sale used in every appraisal creating more less accuracy and more inconsistencies! The previous measurement standard used by Fannie & Freddie was already very similar to the one used in public records and therefore gave more consistent and accurate value estimates when used properly. It is astonishing to me that 2 quasi-government organizations, staffed with supposed experts could be so ignorant and put so little thought into this decision. I am glad to see that FHA, VA & USDA continue to use their more sensible measurement standards.