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Old 07-29-2008, 03:58 PM
joey heydt joey heydt is offline
 
Join Date: Apr 2006
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Default FHA guidelines on Site Size

Hi all,

We are getting ready to appraise a house on 15 acres. Are there any specific FHA guidelines concerning site size?

JH
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Old 07-29-2008, 04:50 PM
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Scott R Marshall Scott R Marshall is offline
 
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Joey,


I am assuming your supervisor wants you to find this out for him because if its an FHA appraisal your signature can't be on the appraisal although I'm pretty sure you can get experience hours for it. As far as FHA is concerned there are no limits on site size/value to site but they want you to consider the possibilty of excess or surplus land and only make site adjustments for measureable differences between your subject and the comps used, which by the way, is what we should be doing an all appraisals.
  #3  
Old 07-29-2008, 05:01 PM
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Hamlet Hamlet is offline
 
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Also, FHA will not allow you to appraise only 5 acres out of 20.
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Old 07-29-2008, 06:27 PM
ZZGAMAZZ ZZGAMAZZ is offline
 
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Default excess

Just my interpretation based upon limited exposure:

Market reaction to the subject's excess land should not be calculated. Of course, one first needs to determine whether the portion of the parcel above-and-beyond what what is needed to support the current improvements is surplus or excess, per the typical industry definitions. FHA guidelines imply that if the lot size is typical for the neighborhood, the excess (as classically defined) would not have to be considered as excess, regardless of whether the "extra" portion of the lot might have a legally permissible life of its own. If so, your rationale would need to depicted in the comp selection and (absence of) adjustments. Of course adjustments wouldn't be applied if the comparables are similar in size, but if one or two of the comps have smaller lots, one should be careful in making supplemental upwards adjustments for excess land, which the appraiser is instructed to "describe it but do not value it." [4150.2.4.4]

(maybe I'm way wrong and if so appreciate the advice of others...)

Last edited by ZZGAMAZZ : 07-29-2008 at 06:32 PM.
  #5  
Old 07-29-2008, 06:46 PM
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Mr Rex Mr Rex is offline
 
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4-4 UNIQUE PROPERTY APPRAISALS
Appraisers are sometimes faced with unique properties: a log home, an extra small home, lower than normal ceiling heights, etc. Eligibility of these properties depends on whether or not the property is structurally sound and readily marketable. If a property meets these criteria, the appraiser estimates market value. However, depending on the uniqueness of a property, the final determination to accept or
reject the property is made by the lending institution's underwriter.
Excess land is another area in which to exercise caution. Land is considered to be excess if it is:
o larger than what is typical in the neighborhood
AND
o capable of a separate use
o If there is excess land, describe it but do not value it. In this instance, the appraisal is based upon
a hypothetical condition. A legal description of the portion being appraised is required.
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Old 07-29-2008, 06:52 PM
Wayne Tomlinson Wayne Tomlinson is offline
 
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Use comps of similar size.

Wayne Tomlinson
  #7  
Old 07-29-2008, 07:15 PM
ZZGAMAZZ ZZGAMAZZ is offline
 
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I think that "AND" is a key word. Maybe I'm making too much of it--and of course Wayne says it all as far as the SCA is concerned--but the "AND" in my opinion implies that it's not excess if it's typical, even if it is large enough to be split into a separate legal parcel. This--again, in my newbee opinion--either overlooks or supercedes a critical distinction between "surplus" and "excess" in the classical definintion.
  #8  
Old 07-29-2008, 07:34 PM
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My personal experience is that if you can find similar comps, its not excess in FHA's eyes. If you can't find recent comps on similar size sites ( in a county where large sites are the norm, just can't find comps within 12 months to show market acceptance of 15 acre sites on 100 year old 1000sf houses) then its excess in FHA's eyes. Got to have a legal description for the hypothetical site then or you are in house and 5 limbo land
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