FHA Single Family Housing Policy Handbook TABLE OF …

1 FHA Single Family Housing Policy Handbook IV. Appraiser and Property requirements for Title II Forward and Reverse Mortgages TABLE of Contents 8/27/14 i FHA Single Family Housing Policy Handbook 1 TABLE OF CONTENTS 2 IV. APPRAISER AND PROPERTY requirements FOR TITLE II 3 FORWARD AND REVERSE MORTGAGES .. 1 4 ACCEPTABLE APPRAISAL REPORTING FORMS AND PROTOCOLS .. 1 Mortgagee requirements to the Appraiser .. 2 Mortgagee requirements to the Appraiser for New Construction .. 2 requirements for the Submission of the Appraisal Report and Data .. 2 PROPERTY ACCEPTABILITY CRITERIA .. 3 Application of Minimum Property requirements and Minimum Property Standards by Construction Status.

2 3 11 a. Existing 3 12 b. New Construction .. 3 13 Appraiser Responsibility for Reporting Property Eligibility .. 3 a. Defective Conditions .. 3 15 b. Defective Conditions Requiring Repair .. 4 16 c. Inspection by a Qualified Individual or Entity .. 4 17 Minimum Property 4 a. Legal requirements .. 4 19 Real Estate Entity .. 4 Property Rights .. 4 Planned Unit Development .. 4 Leasehold 5 b. Legal and Land Use Considerations .. 5 24 Party or Lot Line Wall .. 5 Non-Residential Use of Property .. 5 Zoning .. 5 Encroachments .. 6 Easements and 6 c. Externalities .. 6 30 Heavy Traffic .. 6 Airport Noise and 6 Special Airport Hazards.

3 7 Proximity to High Pressure Gas Lines .. 7 Overhead Electric Power Transmission and Distribution Lines .. 7 Smoke, Fumes and Offensive Odors .. 8 Stationary Storage Tanks .. 8 d. Site Conditions .. 8 38 Access to Property .. 8 On-Site Hazards and Nuisances .. 8 Topography .. 9 FHA Single Family Housing Policy Handbook IV. Appraiser and Property requirements for Title II Forward and Reverse Mortgages TABLE of Contents 8/27/14 ii Suitability of Soil .. 9 Subsidence .. 10 Operating and Abandoned Oil or Gas Wells .. 10 Special Case - Proposed, Existing or Abandoned Wells .. 10 (A)4 Slush Pits .. 11 Property Eligibility in Special Flood Hazard Areas.

4 11 Coastal Barrier Resources System .. 11 Lava Zones .. 11 Mineral, Oil and Gas Reservations .. 11 Soil Contamination .. 12 Residential Underground Storage Tank .. 12 Grading and Drainage .. 12 e. New Construction Site Analysis .. 12 13 Excess and Surplus Land .. 13 f. Characteristics of Property 13 15 requirements for Living Unit .. 13 Access to Living Unit .. 14 Non-Standard House Styles .. 14 Modular Housing .. 14 Identifying an Accessory Dwelling Unit .. 14 Additional Manufactured Home on Property .. 15 Gross Living Area .. 15 a. Additions and Converted Space .. 15 23 b. Partially Below-Grade Habitable Space.

5 16 24 c. Bedrooms .. 16 25 16 Swimming Pools .. 16 Mechanical Components .. 17 a. Heating and Cooling Systems .. 18 29 b. Electrical System .. 18 30 c. Plumbing System .. 18 31 d. Roof Covering .. 19 32 e. Structural Conditions .. 19 33 f. Defective Paint .. 19 34 Attic Observation requirements .. 19 Foundation .. 20 a. Basement .. 20 37 b. Sump Pumps .. 20 38 Crawl Space Observation requirements .. 20 Environmental and Safety Hazards .. 21 a. Lead-Based Paint .. 22 41 b. Methamphetamine Contaminated Property .. 22 42 c. Wood Destroying Insects/Organisms/Termites .. 22 43 Repair requirements .. 23 a. Minimum Required Repairs.

6 23 45 b. As-Is Condition and Cosmetic Repairs .. 23 46 FHA Single Family Housing Policy Handbook IV. Appraiser and Property requirements for Title II Forward and Reverse Mortgages TABLE of Contents 8/27/14 iii c. Defective Conditions Requiring Repair .. 23 1 d. Conditions Requiring Inspection by a Qualified Individual or Entity .. 24 2 Utility 24 a. Individual Water Supply Systems .. 24 4 b. Water Wells .. 25 5 c. Conditions for Individual Water Supplies .. 26 6 d. Appraiser Reporting requirements for Individual Water Supply Systems .. 27 7 e. Shared Wells .. 27 8 f. Community Systems .. 30 9 g. Onsite Sewage Disposal Systems.

7 30 10 VALUATION AND REPORTING PROTOCOLS .. 31 Photograph, Exhibits and Map requirements .. 31 Intended Use of Appraisal .. 32 Development of the As-Is Property Value .. 32 a. Appraisal Conditions .. 32 15 b. Valuation Development .. 33 16 FHA Data requirements .. 34 Effective Age Remaining Economic Life .. 34 Approaches to Value .. 34 Cost Approach to Value .. 34 (A)20 (1) Land 34 21 (2) Estimate of Cost New for Housing .. 35 22 Income Approach to Value for Residential Properties .. 35 (B)23 Sales Comparison Approach .. 36 (C)24 (1) Comparable Sale Selection .. 36 25 (2) Adjusting Comparable Properties.

8 37 26 (3) Comparable Selection in Diverse Real Estate Markets .. 37 27 (a) Subdivisions, Condominium or Planned Unit Development Projects .. 37 28 (4) Comparable Sale Selection in Rural and Slow Growth Markets .. 38 29 (5) Sales Concessions .. 38 30 (6) Bracketing .. 38 31 (7) Market Condition (Time) Adjustments .. 39 32 (8) FHA Appraisal requirements in Changing Markets .. 39 33 Final Reconciliation and Conclusion .. 40 a. Trainee Appraisers .. 40 35 PROPERTY ACCEPTABILITY CRITERIA FOR MANUFACTURED Housing FOR TITLE II INSURED MORTGAGES .. 41 37 41 Eligibility and General requirements for Manufactured Housing under Title II.

9 42 Foundation Systems .. 42 Running Gear .. 43 Perimeter Enclosure .. 43 Label Required .. 43 Data Plate .. 43 FHA Single Family Housing Policy Handbook IV. Appraiser and Property requirements for Title II Forward and Reverse Mortgages TABLE of Contents 8/27/14 iv Manufactured Housing Units Located within Condominium Projects .. 44 APPRAISER requirements FOR MANUFACTURED HOME APPRAISALS .. 45 Flood Zone .. 45 Perimeter Enclosure .. 45 Additions to Manufactured Housing .. 45 Measurement Protocols .. 45 Sales Comparison Approach for Manufactured Housing .. 45 Estimate of Cost New for Manufactured Housing .

10 45 CONDOMINIUM PROJECTS .. 46 Site Condominiums .. 46 Manufactured Housing Condominium 46 VALUATION OF LEASEHOLD INTERESTS .. 47 APPRAISAL OF Single Family Housing ON INDIAN LANDS .. 48 Introduction .. 48 Property Rights to be Appraised .. 48 a. Fee Simple Unrestricted .. 48 16 b. Tribal Trust Lands, Restricted Trust Land .. 48 17 c. Tribal Trust Lands, Allotted Trust Land .. 49 18 Approaches to Value .. 49 Cost Approach to Value .. 49 a. Cost Approach for New 49 21 b. Cost Approach for Existing Construction .. 50 22 Sales Comparison Approach to Value .. 50 Income Approach to Value .. 51 Final Reconciliation of Value.