Under Fannie Mae guidelines, which neighborhood characteristic is prohibited to consider in valuation?

• A. The age or sex of residents
• B. Crime rate
• C. School quality
• D. Proximity to transit

Answer: (A)

The key idea is fair housing compliance in valuation. Appraisers must base value on objective market data and observable neighborhood factors, not on characteristics of who lives there. The age or sex of residents is a protected characteristic, and using it to assess or adjust value would discriminate on the basis of age or gender, which is prohibited by fair housing laws and Fannie Mae guidelines. That’s why this is not allowed in valuation.

Other neighborhood factors like crime rate, school quality, and proximity to transit are appropriate to consider because they reflect factors that influence desirability and price in the market and can be supported by objective data.