FHA H&b Use Analysis

[Nancy Price]

Client stated that H&B use analysis required for FHA appraisal now. Subject property is an existing home typical of the neighborhood. Could only find H&B use required for excess land. Anyone know where I can find this directive?

 

[Randolph Kinney]

Client stated that H&B use analysis required for FHA appraisal now. Subject property is an existing home typical of the neighborhood. Could only find H&B use required for excess land. Anyone know where I can find this directive?

Handbook 4000.1 page 437

Handbook 4000.1 page 457

The Appraiser must perform a highest and best use of the Property, using all four tests and report the results of that analysis.

Handbook 4000.1 page 474

Required Analysis and Reporting

The Appraiser must provide a written narrative format or a commercially available reporting form. The appraisal report must include, at minimum, the following:

 property address;

 legal description;

 owner of record;

 occupancy;

 assessment and tax information;

 property rights appraised;

• site size;

• zoning;

• highest and best use;

• shape;

• topography;

• drainage;

• availability of utilities;

 

[The Nightfly]

Reporting HBU analysis (summarize) is mandatory for an Appraisal Report (as defined by USPAP) when an opinion of the HBU was developed. This is for all reports, not just FHA, even when it is obvious to everyone what the HBU is. See Standard 2 (a)(x).

 

[Nancy Price]

Handbook 4000.1 page 437

Handbook 4000.1 page 457

The Appraiser must perform a highest and best use of the Property, using all four tests and report the results of that analysis.

Handbook 4000.1 page 474

Required Analysis and Reporting

The Appraiser must provide a written narrative format or a commercially available reporting form. The appraisal report must include, at minimum, the following:

 property address;

 legal description;

 owner of record;

 occupancy;

 assessment and tax information;

 property rights appraised;

• site size;

• zoning;

• highest and best use;

• shape;

• topography;

• drainage;

• availability of utilities;

Reporting HBU analysis (summarize) is mandatory for an Appraisal Report (as defined by USPAP) when an opinion of the HBU was developed. This is for all reports, not just FHA, even when it is obvious to everyone what the HBU is. See Standard 2 (a)(x).

Handbook 4000.1 page 437

Handbook 4000.1 page 457

The Appraiser must perform a highest and best use of the Property, using all four tests and report the results of that analysis.

Handbook 4000.1 page 474

Required Analysis and Reporting

The Appraiser must provide a written narrative format or a commercially available reporting form. The appraisal report must include, at minimum, the following:

 property address;

 legal description;

 owner of record;

 occupancy;

 assessment and tax information;

 property rights appraised;

• site size;

• zoning;

• highest and best use;

• shape;

• topography;

• drainage;

• availability of utilities;

I have checked pages 437, 457 & 474 on the HUD portal and cannot find. What am I doing wrong?

 

[CANative]

We've ALWAYS had to summarize the rationale for the HBU decision. SR 2. Box checking is stating, not summarizing.

Here's the FHA 4000.1 on it. Note that all 4 tests must be included.

 

[CANative]

What am I doing wrong?

Download the most recent version of 4000.1 and save it to your desktop file of manuals and documents.

Use the word search function (Control F) to find things quickly.

 

[CANative]

Highest and Best Use Analysis:

As Vacant: The RR5 zoning district allows for a number of uses including limited agricultural and commercial uses where appropriate, in addition to the primary permitted use which is single family residential (one dwelling unit due to location in the Coastal Zone.) Developing a single family residence is both legally and physically permissable. Market analysis and cost analysis appears to indicate that financial feasibility is in question as the sales data may not allow for sufficient entrepreneurial profit or incentive. This does not rule out an owner/user from developing a property for their own use though. It is my opinion that highest and best use, as though vacant, is to hold for investment or construct a residential improvement for it's amentity benefit versus anticipation of developer profit.

As Improved: The subject is improved with a good quality single family residence with additional accessory structures (garage and shop). The use is legal and conforming. There is no indication that a different use or change in use is indicated and the improvements continue to function as designed and continue to contribute to the value of the property. Therefore, highest and best use, as improved, is to contue the current use.

 

[Mr Rex]

Client stated that H&B use analysis required for FHA appraisal now. Subject property is an existing home typical of the neighborhood. Could only find H&B use required for excess land. Anyone know where I can find this directive?

Really? What are they thinking with all these changes?You have got to be kidding me that you are asking is H&BU required for any appraisal?

 

[Tom D]

i use 4 h&b, i look directly at the row house subject, i look to the left at all the other row houses, i then look to the right at all the other same row houses, and finally i look across the street at all the other same row homes. since i have to take those same street scenes i have accomplished 2 tasks. what is excess land? is that the vacant lots on the subject street, or the ones next to you. i wish i was an avm.

 

[Deleted member 128537]

In most cases the highest and best use analysis as vacant is pretty simple. In residential properties the question may come up if zoning could be used as multi-family and single-family due to legal zoning. In general it has to be very obvious; such as an extreme shortage of rental property that's causing rents to skyrocket. And you could easily make the case that multi-family residential was the highest and best use. The emphasis is on "easy." I think it should be very clear. For example I did have a case where a property was zoned legally as residential, however everything around it was zoned commercial. In fact the people got it rezoned from commercial to residential to try and get a residential loan. But I told the mortgage company that in my opinion it was maximally productive as commercial since everything around it was commercial and the neighborhood was clearly in transition. They still didn't get the loan. Ironically they were running a business out of the house! As I said pretty darn clear!