There is no set maximum or minimum amount of acreage/site value on the appraisal! FHA appraisers are instructed to give site value for acreage that is “typical” for the area. Which means if the borrowers home is on 100 acres of land and that is typical for the area and the appraiser can find like comps to use with that acreage then the borrower can receive value for all of that acreage. However, if the appraiser can only find comps to support 50 acres of land and that is typical for the area then the appraiser can only give value to that amount. When taking apps for your borrowers let them now the appraiser will give value for what is “typical” for the area, and will have to find comps to support the site value.
Guideline below…
There is no maximum or minimum
requirement for the size of the subject property. If the subject property site size
is excessive, such as 30 acres in an area where only 10 acres is typical, the
appraiser must note the total subject property site acreage (30 acres) but only
give value to the typical acreage (10 acres). More than one lot/parcel can be
included in legal description and appraisal as long as under one tax id number
(assessor’s parcel number). The Excess Land Certification can be used if
borrower wishes to leave the excess land on the title.
- FHA has strict
requirements on the time elapsed for comps. Appraisers may need to be
reminded to check HUD handbook 4150.2 which states the appraiser should…
" Consider
the amount of time that has elapsed between the sale date and the effective
date of the appraisal. Sales data should not exceed six months between the date
of the appraisal and the sale date of the comparable, and must not exceed
twelve months. An explanation is required for sales dates in excess of six
months.”
The appraiser
must provide a minimum of 3 comparable sales within 12 months of the
effective date of the appraisal. Those comps must be listed in comparable
spots 1-3 on the appraisal report. If the property
is in a declining market as shown on pg. 1 the appraiser must provide 1 comp.
within 12 months, 2 comps within 90 days and 2 active listings.
The distance of
the comps should be within 1 mile in urban locations, less than 5 miles
in suburban locations and may be over 5 miles in rural locations. If
greater than these distances the appraiser must explain. There is no
limit to the distance an appraiser may go to find comparable sales,
however, the distance and explanations must make sense and the underwriter may
condition for more information.
Peeling Paint … if an appraiser marks an
appraisal as “subject to” due to peeling paint the UW may
be able to waive this repair. There are a
few things that need to happen first, but it
is possible.
Here are the requirements to
get it waived…
-
The borrower must
have marked on the General Disclosures that they do not have any children under
the age of 6 in the home (this is a check box question)
-
The appraiser
must comment (or the photos must clearly show) that there is not any exposed
wood so we can be sure no rotting will occur (not required if in the
interior)
-
The peeling paint
cannot be extensive (the UW will determine if it is)
The UW can then completes a 54114 to correct the appraisal and waive the
repair requirement.