Duplex on a 1004?

[Michael Tipton]

At least FHA has attempted to clarify the issue. Appendix D: Valuation Protocol includes the following:

Accessory Unit/Accessory Dwelling Unit

The accessory unit is defined as a habitual living unit added to, created within, or detached from a single-family dwelling that provides the basic requirements for living, sleeping, eating, cooking, and sanitation.

Accessory Dwelling Units are commonly understood to be a separate additional unit, including separate kitchen, sleeping, and bathroom facilities, attached or detached from the primary unit and may or may not have separate means of ingress or egress.
Attached units, contained within a single-family home, known as "mother-in-law apartments," are the most common type of accessory dwelling unit. Accessory units usually involve the renovation of a garage, basement, or small addition to a single-family home.

FHA Criteria

"Accessory dwelling unit" means a subordinate dwelling unit may or may not be incorporated within, or detached from a single-family structure. Accessory units may not be subdivided or otherwise segregated in ownership from the primary residential structure.

Some accessory units may predate the adoption of local zoning ordinances and may therefore be classified as legal nonconforming units.

FNMA and Freddie, when will you provide a definition?

 

[KenRossman]

Reporting form or format is a scope decision between the appraiser and the client. Verbal, whatever form or even toilet paper is perfectly acceptable if the parties agree and there is complete disclosure as required by USPAP. Putting something on an inappropriate form (say in accordance with FNMA guidelines) will only result in the appraisal being not usable to submit to FNMA. With proper disclosure, it is not misleading.

I.E.: I have a client who lends his own money. He likes the old QAR 2055 form with walkthrough for all 1-4 family because it saves his already strapped borrowers a little money.

He could care less about the potential income capability - he is only concerned about market value based upon the DSCA.

 

[Alison Swain]

Looks like this refi assignment may be dead in the water. When I started my preliminary research, I discovered that the property is has a current, active listing in MLS. Spoke with the owner/borrower and he said that his LO is not aware of the listing because the listing was supposed to have been withdrawn (that's about the third time I've heard that in the past 60 days).

Whatever.

 

[James Andreas]

In my market, Accessory Units cannot legally be used to generate income.

And the URAR cert is pretty clear:

"This report form is designed to report an appraisal of a one-unit property or a one-unit property with an accessory unit; including a
unit in a planned unit development (PUD). "

..meaning no Duplex/Triplex/Quads - they have right to generate income. Accessory unit does not. In my market AU cannot have a kitchen. Use URAR.

To confuse matters a "second unit" with kitchen (2nd SFR) can be on-site with an SFR and is NOT a duplex.

Part 16 and section 65852.2 of the California Government Code allows a
2nd "unit" on site with an SFR, and "A second unit applicant shall be an owner-occupant of the single-family residence that is located on the same lot or parcel of land. Thereafter, either the single-family residence or the second unit shall be owner-occupied in perpetuity."

In my market this "unit" (2nd SFR essentially) does not have same rights as a legal duplex. URAR.

These are relevant terms and identifiers for my market.

 

[karinkelsey]

Why are you doing inspections on a Sunday???

 

[Webbed Feet]

To All,

My market is very much like what Mr. Andreas describes his to be. What is a multiple unit income property and what is a SFR with ADU is normally identifiable. But the catch is it takes some research at times. I personally class anything with an ADU, or dissimilar units, as "Complex" myself. The cause is what I have found in appraisals of these done by "Licensed Appraisers." Not that the license type should have mattered. But to me it's clear far too many appraisers rush through such assignments with a goal of making the properties appear as if they qualify for a conforming SFR loan, when many do not. Or the appraiser never understood what they were appraising.

Webbed.

 

[Alison Swain]

Why are you doing inspections on a Sunday???

Typically, I do not. But the owner/borrower is a firefighter (three days on/three days off). I figured if he can risk his life to help people in my county, I can get my fat *** out of bed on Sunday to help him.

 

[Kevin Mc]

I've done it.

I have a lender who has requested that an assignment for a duplex be reported on a 1004 form. Is this kosher? Supposedly, this is not going to the secondary market. If allowable, should I put this on the old form?

Old school portfolio lender in NY does all their 2-4 fams on 1004 old form. They just want the value, nothing more.

 

[Carnivore]

To All,

My market is very much like what Mr. Andreas describes his to be. What is a multiple unit income property and what is a SFR with ADU is normally identifiable. But the catch is it takes some research at times. I personally class anything with an ADU, or dissimilar units, as "Complex" myself. The cause is what I have found in appraisals of these done by "Licensed Appraisers." Not that the license type should have mattered. But to me it's clear far too many appraisers rush through such assignments with a goal of making the properties appear as if they qualify for a conforming SFR loan, when many do not. Or the appraiser never understood what they were appraising.

Webbed.

Webbed,

I was just about to bring into the mix the license level requirements. It makes me think this was another Tail Wagging Dog, when they realized that the appraiser labor force would be reduced conversely appraisal cost would rise.

Old school portfolio lender in NY does all their 2-4 fams on 1004 old form. They just want the value, nothing more.

Why not really save them some bucks and just do it on a napkin.

Although, Toilet Paper with the appropriate USPOOP might be more credible!

 

[Krystal Schware]

I guess the first question should be...are both "halves" on one deed or two separate deeds? If separate deeds, should really be 2 separate 1004's done.
I have done this before for lender's. The key is to disclose, disclose, disclose. I always add a comment to the effect of "At the lender's request, the appraiser has completed this appraisal on the "X" form as opposed to the FNMA 1025"...yada, yada.