How Close Should Comps Be? The Distance Rules, and Where They Break
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Short answer
There is no maximum distance. Fannie Mae requires the distance to be reported — in miles, with a direction, measured straight-line — but sets no cap. Working conventions are roughly a quarter to half a mile in dense urban areas, half a mile to a mile in suburbs, and one to five miles or more rural. But distance is a proxy for similarity and a poor one: a comp across a school district line, an arterial or a jurisdiction boundary is usually worse than one twice as far away inside them.
Ask ten agents how close a comp has to be and most will say a mile, several will say half, and at least one will tell you Fannie Mae requires it.
Fannie Mae does not. There is no maximum distance for a comparable sale anywhere in the Selling Guide.
What the guidance actually says
Fannie Mae's requirement on proximity is about disclosure, not limitation. The appraiser must be specific about distance in miles and include a directional indicator — the guide's own example is "1.75 miles NW" — measured as a straight line between the properties.
That is the whole rule. State how far, and which way. No cap.
The reasoning is sound: the appraiser is responsible for selecting the most appropriate comparables and explaining why. A rigid radius would force bad selections in exactly the markets that need judgment most.
The straight-line detail matters more than people think
Distance is measured as the crow flies, not by road. Two houses 0.4 miles apart in a straight line can be:
- On opposite banks of a river with the nearest bridge three miles away
- Separated by a rail corridor or a limited-access highway with no crossing
- On opposite rims of a canyon or a ravine
- In different municipalities with different tax rates and different schools
Every one of those pairs looks adjacent in a distance filter and belongs to different markets. Automated comp selection makes this error more consistently than humans do, because a radius query cannot see a river.
Working guidelines by market type
These are conventions, not standards. Use them as starting points.
| Market type | Starting radius | What actually constrains it |
|---|---|---|
| Dense urban | 0.25–0.5 mi | Blocks change character fast; stay in the micro-market |
| Suburban tract | 0.5–1 mi | Subdivision and school boundary, not the circle |
| Mixed suburban | 1 mi | Price tier and lot size vary more than distance suggests |
| Small town | 1–3 mi | Often the whole town is one market |
| Rural / acreage | 3–10+ mi | Similarity of land use, not proximity |
| Condo in a project | Same building first | Same-project sales beat anything nearby |
The FHFA data supports the intuition behind the rural rows: in a 5% national sample of appraisals, the share using five or more comps was about 13 percentage points lower in rural areas than in high-density urban ones. There is simply less nearby to use.
The boundaries that beat distance
These break comparability regardless of how close the property is. Check them before you check the radius.
School attendance boundaries
The biggest one in most family-housing markets. Two identical houses on opposite sides of an attendance line can differ by 5–15% in markets where the schools differ in reputation. The boundary is often invisible on the ground and always invisible to a radius filter.
Municipal and tax jurisdiction lines
Different tax rates, services, and sometimes different rules on rentals or additions. A buyer comparing two houses with a $2,000 annual tax difference is comparing different total costs of ownership.
Physical severances
Highways, arterials, rail lines, rivers, industrial strips. These are usually where a neighbourhood's identity ends, whatever the map says.
HOA status and dues
HOA and non-HOA are different products. So are two HOAs with materially different dues — $80 a month and $400 a month capitalise very differently into price.
Flood zone designation
A zone boundary can add several thousand dollars a year in required insurance. It can run down the middle of a street.
When the further comp is the better comp
Reach further, deliberately, when:
- The nearby sales are a different property type or price tier
- The subject is unusual and the genuine equivalents cluster elsewhere
- Nearby sales are all non-arm's-length — a foreclosure wave in one pocket, say
- The subject sits on a boundary and the market it belongs to is on the far side
- A nearby subdivision is superficially similar but sells to a different buyer
In each case say why in the report. "4.1 miles SE, selected because it is the nearest comparable acreage property with a similar improvement" is a defensible sentence. An unexplained four-mile comp is not.
The order to actually screen in
- Boundaries first. Draw the real market area: subdivision, school zone, jurisdiction, the far side of the arterial excluded.
- Then property type and size within that area.
- Then recency.
- Then distance — as a tiebreaker among properties that already passed.
Distance last, not first. It is the criterion most tools apply first because it is the easiest to compute, which is precisely why automated comp sets tend to include a house across the highway. The full screening sequence is here.
The test
Distance is a proxy for a question you can just ask directly:
Would a buyer looking at the subject have genuinely also considered this property?
A buyer choosing between two houses a mile apart in the same school district, same price tier, same HOA — yes. A buyer who would never have crossed the arterial because their child's school is on this side — no, at any distance.
The bottom line
There is no maximum distance and no one-mile rule. Fannie Mae asks you to state distance and direction, and to justify your selection.
Use radius conventions as a starting frame, then override them with the boundaries that actually segment your market. Screen boundaries first and distance last, and be ready to explain any comp that reaches — because a well-explained distant comp is stronger evidence than an unexamined nearby one.
Frequently asked questions
How far away can a comp be?
There is no fixed limit. Fannie Mae requires the appraiser to state the distance in miles with a directional indicator, such as 1.75 miles NW, measured as a straight line between the properties, but sets no maximum. More distant comparables are routine and accepted where they are the best available evidence and the selection is explained.
Is there a one-mile rule for comps?
No. The one-mile figure is a common suburban and urban convention that many people assume is a Fannie Mae requirement, but it does not appear as a rule in the Selling Guide. It is a reasonable default in a dense tract subdivision and a meaningless one in rural or mixed-density areas.
Should comps be in the same neighbourhood?
Same market segment matters more than same neighbourhood name. What genuinely breaks comparability is crossing a school attendance boundary, a municipal or tax jurisdiction line, a major physical severance like a highway or rail line, a flood-zone designation, or an HOA boundary with different dues.
Is a closer comp always better?
No. A house 0.3 miles away in a different school district, on a different side of a six-lane road, or in a different HOA is often a worse comparable than one 1.2 miles away inside the same boundaries. Distance is only useful as a proxy for the things that actually drive value.
How is comp distance measured?
As a straight line between the two properties, per Fannie Mae, not driving distance. This is worth knowing because straight-line distance can be very misleading where a river, a highway, a rail line or a canyon means two properties half a mile apart as the crow flies are twenty minutes apart by road and in entirely different markets.
Sources
- Fannie Mae Selling Guide B4-1.3-08, "Comparable Sales" (effective 06/04/2025) — the appraiser "must be specific with respect to the distance in terms of miles and include the applicable directional indicator (for example, '1.75 miles NW')," measured using a straight line between the properties. No maximum distance is specified. A minimum of three closed comparables must be reported.
- FHFA, "Counting Comps," Uniform Appraisal Dataset Public Use File (5% nationally representative sample, 2013–2021) — the share of appraisals with five or more comparables was about 13 percentage points lower in rural areas than in high-density urban areas, evidence that comp availability varies sharply with density.
- Radius conventions by market type (quarter-mile urban through five-mile-plus rural) are widely used industry practice rather than a published standard; Opendoor, for example, publishes one mile urban and five miles rural as its own guidance. Treat them as starting points, not rules.