According to Fannie Mae, which neighborhood factors must not be considered in the valuation process?

• A. The age or sex of individuals living in a neighborhood
• B. Crime rates
• C. Proximity to schools
• D. Property values

Answer: (A)

In appraisal practice, judgments must not hinge on the characteristics of people who live in a neighborhood. Age or sex of residents are protected demographic attributes, and basing value decisions on them would amount to discrimination. Fannie Mae guidance requires focusing on objective neighborhood conditions that influence value without regard to who lives there, so you avoid using any factor that reveals or implies protected class information.

Factors like crime rates, proximity to schools, and surrounding property values describe the neighborhood’s actual market conditions and can influence demand and price. They are considered legitimate, observable attributes to assess risk and desirability when used in a neutral, data-driven way. The key is to rely on verifiable neighborhood characteristics and not on who sits in those homes, which keeps the appraisal fair and compliant.