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Old 02-18-2010, 05:08 PM
lukedinh lukedinh is offline
Join Date: Feb 2010
State: Texas
Professional Status: Real Estate Agent or Broker
Posts: 3
Default One Unit with Accessory Unit on top of detach Garage Underwriting Question

Dear All Appraisers,
Anyone of you has done appraisal report one unit with additional Accessory Unit attached.
Per Fannie Mae/Freddie Mae guideline Is it possible to satisfied those condition and requirement below ? Any of Appraisers willing to spend extra time for those condition request by lender? Thank you for your feedback.

Fannie Mae and Freddie Mae Guideline
2009 April 2009 - Fannie Mae Selling Guide - Pages 465-466.

Loan Eligible for Purchase or Securitization
by Fannie Mae?

A one- or two-unit property that includes an illegal additional unit or accessory apartment (sometimes referred to as a mother-in-law,
mother-daughter, or granny unit).

Yes, provided that
• The illegal use conforms to the subject neighborhood and to the market.
• The property is appraised based upon its current use.
• The borrower qualifies for the mortgage without considering any rental income from the illegal unit.
• The appraisal must report that the improvements represent an illegal use.
• The appraisal report must demonstrate that the improvements are typical for the market through an analysis of at least three
comparable properties that have the same illegal use.
• The lender ensures that the existence of the illegal additional unit will not jeopardize any future hazard insurance claim
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Old 02-18-2010, 05:38 PM
Mike Kennedy's Avatar
Mike Kennedy Mike Kennedy is offline
Join Date: Sep 2003
Location: Southern Hudson Valley
State: New York
Professional Status: Certified Residential Appraiser
Posts: 28,203

Not exactly sure what your request is. A Single Family Residence with a detached Accessory Unit either is a Legal, Legal-Nonconforming, or an Illegal Use under specific Municipal Building and Zoning Ordinances (assuming urban, suburban, or rural markets where such Ordinances/local Laws exist). Determining same is standard appraisal procedure.

The Market determines any Contributory Residual Value of either an attached (in-law) or detached (in-law) Accessory Unit. Whether one may be utilized to generate Income via Rental is part of the Process above. Legal Accessory Units in detached structures are NOT included in the total Estimated GLA (gross living area) of a single family home.

After determining the Legal Use Status above, market research is conducted to identify the most similar, proximate, and recent Closed, Contracted, and Actively Listed properties which would directly compete with a Subject Property to determine the prevalence of similar Amenities and to extract the market's indication of Contributory Value AS OF a specific Effective Date of Appraisal.

The Fannie Guidelines you posted are quite explicit WHEN an Accessory Unit is Illegal. Whether Illegal, or Legal, the best available Market Data will demonstrate the local Market's perception of any additional Value attributed to the Site, As-Improved.

Is it possible to satisfied those condition and requirement below ?

Yes. Doing so is Standard Appraisal Practice. Time and increased Complexity considerations are typically factored into "turn-around" time and appraisal fee. Local Market Geo-Competency and Experience appraising such properties are crucial when engaging an Appraiser for this property type.

p.s. there are many Appraisal Forum Members in Texas who possess the Competence to assist your Lender. Should the Lender in this case need assistance, suggest they post a REQUEST FOR ASSISTANCE-APPRAISAL ASSIGNMENT in the ......Texas State Board
Kill the Contract Review Bull$eye - Now.

Last edited by Mike Kennedy : 02-18-2010 at 05:47 PM.
Old 02-18-2010, 06:03 PM
Riick's Avatar
Riick Riick is offline
Join Date: Aug 2007
Location: DuPont: "Better Living through Chemistry"
State: Delaware
Professional Status: Certified Residential Appraiser
Posts: 9,155

What's even more fun -as an appraiser- is doing a property where there is a legal
rental unit, but, where the "owner's unit" is say 6,000 sq.ft. and then there's a
1 br "rental unit" of say 625 sq.ft.
..... and there are NO, and I mean Zero similar properties.

“If you would know who controls you, see who you may not criticize.” - Tacitus -Rome 96 A.D.
Old 02-18-2010, 06:21 PM
lukedinh lukedinh is offline
Join Date: Feb 2010
State: Texas
Professional Status: Real Estate Agent or Broker
Posts: 3

Thank you,
I believe appaiser will have a hard time gather all the data for the report.
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