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FHA 203k Rehab Loan?

Discussion in 'FHA/HUD and VA' started by mcgarland, Nov 11, 2008.

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  1. mcgarland

    mcgarland New Member

    0
    Aug 18, 2007
    Professional Status:
    Licensed Appraiser
    State:
    Maryland
    I just received and order for an FHA 203k rehab loan, and the UW is requesting a URAR and the form HUD-92800.5B, Conditional Commitment Direct Endorsement Statement of Appraised Value. I’m not familiar with this form. I have completed a number of appraisals per repairs and then added a 1004D when completed, but this is my first request for this form.

    I searched HUD’s website to find information on this and went through the handbook, however, I can only find the actual form. Does anyone have experience with this type of assignment? Any help would be appreciated as I need to decide whether or not to accept this order.
     
  2. ghrousseau

    ghrousseau Member

    0
    May 5, 2006
    Professional Status:
    Licensed Appraiser
    State:
    Virginia
    HUD-92800.5B is a form completed by the FHA direct endorsement underwriter and has nothing to do with the appraiser. Have you done a 203K assignment before?? There is a lot more to know about the assignment than typical and there is a FHA approved 203K loan consultant who will be involved.
     
    Last edited: Nov 11, 2008
  3. mcgarland

    mcgarland New Member

    0
    Aug 18, 2007
    Professional Status:
    Licensed Appraiser
    State:
    Maryland
    Thank you for the quick response. Although I have been appraising for over 6 years, I have never done a 203k assignment.
     
  4. JSmith43

    JSmith43 Elite Member

    9
    May 5, 2003
    Professional Status:
    Certified General Appraiser
    State:
    California

    There may or may not be a consultant involved. If it is a 203K streamline assignment, a consultant is not required. Either way, you need a copy of the work write-up.

    Send me your email address: home loans @ usfamily. net (remove spaces) or browse my 203K site for answers www. minnesota renovationloans and reversemortgages .com (remove spaces)

    I will forward you the relevant mortgagee letters. Basically, appraise as is and as if repairs are completed per work write up.

    Usually the consultants do a good job of identifying and including minimum property standards stuff, but be sure to do your own due diligence and note your observations for the UW.

    The consultants are human and you may see something they don't. Relying on their write-up to include all minimum property standards items is no defense if something is missed.
     
    Last edited: Nov 12, 2008
  5. Don Clark

    Don Clark Elite Member

    2
    Jan 17, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Virginia
    Just a suggestion....

    1.Read the Competency Rule of USPAP before doing anything further for FHA.

    2. If you have used the 1004D for a final for repairs for an FHA appraisal, you have used the wrong form. You are required to use the Compliance Inspection Report.

    3. If you have never completed an appraisal for the FHA 203K loan program you must disclose that to the client.

    4. Affiliate yourself with an appraiser who is well versed in the FHA 203K program.

    One other thing....FHA Questions may get a better response if put in the VA/FHA Forum.
     
    Last edited: Nov 12, 2008
  6. JSmith43

    JSmith43 Elite Member

    9
    May 5, 2003
    Professional Status:
    Certified General Appraiser
    State:
    California
    As I re-read the OP, I say Don's comments are spot on. I assumed you are working with a cert. res. on this and doing the pioneering right now.

    If you don't ultimately have a "wing man" for this assignment, you should make a few calls and get one. There are enough things that can go wrong during the 203K process. It will be a detriment to all involved to throw on another layer of risk and complication. I give you credit for digging for the answers and wish you well.
     
  7. Don Clark

    Don Clark Elite Member

    2
    Jan 17, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Virginia
    The OP might wish to read this as well:

    http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm
     
  8. JSmith43

    JSmith43 Elite Member

    9
    May 5, 2003
    Professional Status:
    Certified General Appraiser
    State:
    California
    Not trying to outdo you, Don. That link you posted is probably the best overview of the regular 203K program. I have it featured on my 203K web site. But, since you weighed in, this might become a thread that pops up in 203K searches quite a bit. Moderator: How about transferring this thread to the FHA section?

    This is a master link for all 203K related mortgagee letters.http://www.hud.gov/offices/hsg/sfh/203k/203kltrs.cfm
    As a LO, I wouldn't let an order go out to an appraiser that didn't know the programs and features as they relate to problem identification.

    For example: If you see a suspected so called "luxury item" on the work write up, you need to alert your client, since it is not acceptable under 203K guidelines. There goes the swimming pool or outdoor hot tub. A deck is OK. See what I mean?
     
  9. Michigan CG

    Michigan CG Moderator Staff Member Moderator

    27
    Nov 1, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Michigan
    D. Appraisal Fee. To process a Section 203(k) mortgage, two appraisals can be performed: (1) As-is value of the property; and (2) Estimated market value of the property assuming completion of the rehabilitation. The maximum fee which a lender may collect for these two appraisals is one and one-half times the amount permitted for a Section 203(b) proposed construction appraisal, as established by the HUD Field Office. If only one appraisal is done, the fee will be the same as a proposed construction appraisal.

    HUD sets appraisal fees?
     
  10. JSmith43

    JSmith43 Elite Member

    9
    May 5, 2003
    Professional Status:
    Certified General Appraiser
    State:
    California

    Tim, that is a link to a great overview by HUD of the 203K process, but obviously, the most recent mortgagee letters rule. MORTGAGEE LETTER 2006-04 is the most recent one that addresses fees in general & describes the newly enlightened move toward market based thinking on the matter. About 10+ years ago HUD announced that they would no longer set appraisal fees...I think that was in 1997.

    Don??
     
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