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usda? zoned B2-retail business-non-conforming residential use

Discussion in 'FHA/HUD and VA' started by Debra, Jan 28, 2013.

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  1. Debra

    Debra Senior Member

    1
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Tennessee
    USDA question!.....went to the property today. Then, called zoning a few hours later. It's being used as residential, is being purchased to live in, was marketed as residential. Most of the properties on the street are residential. Best I can tell so far, it does back up to and on one side is a bank property. On one side is a residential property and across the street are residential houses. At this time, it's highest and best use is residential. However, it's zoned b2-retail business and it can not be built back as a residential property if it is destroyed. It was grandfathered in as non-conforming residential use according to local zoning. The house was built in the 1960s. Will usda lend on this property? I read somewhere that usda will loan on "legal non-conforming" but am not finding it at the moment and need a fast answer if possible. help? :)
     
  2. Debra

    Debra Senior Member

    1
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Tennessee
    4150.2, page 19:

    "Zoning Compliance:
    • Determine whether the current use is in compliance with the zoning ordinances. Mark whether it is Legal, Legal Non-Conforming (Grandfathered Use), No Zoning, or Illegal Use.
    • If the existing property does not comply with all of the current zoning regulations (use, lot size, improvement size, off street parking, etc.) but is accepted by the local zoning authority, enter “Legal Non-Conforming” and provide a brief explanation."

    So, if I'm reading this correctly, if it's considered "LEGAL non-conforming" then it is acceptable for usda. Please correct me if I'm wrong. Thanks!
     
  3. Mile High Trout

    Mile High Trout Elite Member

    24
    Feb 13, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    Sorry no answer for you on that front.

    But would this require a little technical scope of work alteration though? Since you'll be excluding the 'as converted use' analysis?
     
  4. sputnam

    sputnam Senior Member

    0
    Apr 24, 2012
    Professional Status:
    Certified General Appraiser
    State:
    North Carolina
    It's not really your job to make sure that USDA will make the loan. Your job is to do the best appraisal you can. Check the legal non-conforming box, comment that the improvements can't be rebuilt if destroyed, and leave the underwriting to the lender.
     
  5. leelansford

    leelansford Elite Member

    45
    Mar 29, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois


    In your report of the appraisal, how will you demonstrate the market's reaction to this status?
     
  6. Debra

    Debra Senior Member

    1
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Tennessee
    Well, they just put the order on hold.
     
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