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Old 10-02-2008, 10:08 AM
Josh Kenny Josh Kenny is offline
 
Join Date: Jul 2006
State: Michigan
Professional Status: Appraiser Trainee
Posts: 14
Default Help Please 203k or REO Addendum

Well one of the appraisers who answered my last question was correct, My mentor would like to see me put together the cost to cure part correctly, on the 1004 but also says their are lots of these type appraisals coming are way in the future but not all will be the standard 1004 with cost to cure.

Would someone here be willing to send me a 203k report or a report that has REO Addendum added to it so i could use as a sample and do some learning at the same time. It would be so much appreciated even if and when my mentor gives me 1 or 2 I always like to see other ways that appraisers do things. Instead of only knowing his way.

If you would be nice enough to show me the way you tackel these reports please send it to dreamhomedet@aol.com and as always thanks ahead of time, I always learn so much from the other appraisers here.
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Old 10-02-2008, 04:30 PM
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JENIFFERW JENIFFERW is offline
 
Join Date: Nov 2007
State: California
Professional Status: Licensed Appraiser
Posts: 744
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I got your e-mail and will send you a sample REO.
  #3  
Old 10-05-2008, 12:49 AM
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JSmith43 JSmith43 is offline
 
Join Date: May 2003
State: California
Professional Status: Certified General Appraiser
Posts: 16,585
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Josh, Google HUD Mortgagee letters, and read the 203K mortgagee letters.

Here is the link for a compilation of all the 203K related Mortgagee letters (most recent on the bottom). http://www.hud.gov/offices/hsg/sfh/203k/203kltrs.cfm

Here is appraisal requirements if you are doing an appraisal for a 203K Streamline, clipped from the 5-50 Mortgagee letter:

What are the appraisal requirements under the Streamlined (k) program?

The Streamlined (k) program may be used for discretionary repairs and/or improvements that may not have been identified in the course of a pre-purchase inspection or appraisal. The mortgagee must provide the appraiser with information regarding the proposed rehabilitation or improvements and all cost estimates so that an after-improved value can be estimated. A

description of the proposed repairs and/or improvement must be included in the appraisal report as well as the contractor’s cost estimate. The appraiser is to indicate in the reconciliation section of the appraisal report an after-improved value subject to completion of the proposed repairs and/or improvements.


If it is a 203K Streamline, you will get an amateurish work write-up in many cases, because it was probably a collaborative effort from the borrower, the agent and/or the loan officer. Hopefully, they will send you bid copies of proposed work as well.

If you get a consultant's report along with the bids, more than likely, it is a reasonably coherent write-up. That would indicate a regular 203K renovation loan. You can do two separate appraisal reports (2 different forms), but I think most appraisers would opt for the 2 values reported on the 1004 as described in the part I pasted in above.

It might sound like you are going overboard, but, if you are going to do more than one 203K appraisal, It might be worth reading through the 203K mortgagee letters to get the hang of the program, paying attention to what is allowed improvements, etc.

Example: Suspected luxury items need to be described in sufficient detail since they may not be allowed.

Pay attention to energy efficient improvements and describe them per observation and/or specification. You may not have to do a final inspection on a 203K streamline, if the renovation is under $15,000. It is a lender's call to accept a paid receipt and signed statement of satisfaction with the work, from the owner.
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  #4  
Old 11-26-2008, 09:56 AM
Timothy Rock Timothy Rock is offline
 
Join Date: Jan 2007
State: Florida
Professional Status: Certified Residential Appraiser
Posts: 45
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Is there a specific 203k form or cost to cure form that must be included in addition to the typical FHA 1004? Can the cost to cure be provided within the 1004 addendum with descriptive segregated costs? I am also interested in the details of the 203k appraisal. Thank you for the responses.
  #5  
Old 11-26-2008, 12:01 PM
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Lobo Fan Lobo Fan is offline
 
Join Date: Nov 2004
Location: Rio Rancho, NM
State: New Mexico
Professional Status: Certified Residential Appraiser
Posts: 5,900
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I would rather have a root canal than do a 203K appraisal. First you are doing two appraisals, as-is and subject-to. Then getting all the estimates and bids together and to add up is rarely possible. If you want to spend 3-4 times the amount of effort and then get stpiied to death, then be my guest. I will run away from every 203K I can avoid.
  #6  
Old 11-26-2008, 12:29 PM
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JSmith43 JSmith43 is offline
 
Join Date: May 2003
State: California
Professional Status: Certified General Appraiser
Posts: 16,585
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Quote:
Originally Posted by Lobo Fan View Post
I would rather have a root canal than do a 203K appraisal. First you are doing two appraisals, as-is and subject-to. Then getting all the estimates and bids together and to add up is rarely possible. If you want to spend 3-4 times the amount of effort and then get stpiied to death, then be my guest. I will run away from every 203K I can avoid.
Lobo: Were you doing a 203K streamline or was there a HUD consultant that
did the work write-up?

I think you might have run into a situation where the work write-up was sloppy. If there was a HUD consultant involved, did you try and get clarification? Confidentiality is a PITA when it comes to gaining clarity, so it would help to get email approval to contact the HUD consultant from your client.

Why is it the appraiser's job to get the bids to add up? Maybe I misunderstand your comment. An appraiser should comment if a bid is way out of line, but if the work to be done is described adequately, that should be enough info to develop an as improved MV opinion.

Just describe the repair/improvements and the cost per bid.

Most appraisers have been doing 203K's very infrequently, so this is a great opportunity to share how "peers" handle the situation. It might come in handy at the next board inquiry
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