Fannie Mae and "Multiple Parcels"

[George Hatch]

It is making housing affordable when the subject property consists of two parcels and would not otherwise qualify for a loan. Remember that the Fannie Mae newsletter was about loan eligibility of the subject property. The problem with adding excess land to a mortgage is that the excess land could be sold off, resulting in loan losses. But for this subject property, it can't be sold off without paying off the loan.

Maybe people can't agree on the solution after 1,000+ posts because they can't agree on the problem. People have been filling out forms for so long that they forgot how to do a Scope of Work. Start with Step 1 instead of skipping straight to HBU.

The transaction for the HOUSE on Walnut was obviously financed with a conventional SFR loan, so that blows that theory out of the water.

 

[gregb]

Lemme find the big bank instruction from the SRA reviewer regarding an assignment for two adjoining sites on a refinance, something along the lines "as assembled"....

"Nobody wants an appraisal, they just want to know what the value is." (Steven Santora, ca. 2009)

 

[Carnivore]

I know this thread has over 500 responses - To be precise this post is #533. The reason I keep posting about it is that I am about solutions, not whining/complaining about problems Yes, I whine and complain about AMC's That's different because we can not seem to change their one size fits all mindset. Fast N Cheap is their game. They have a difficult time dealing with the Valuations problems that are outside the small box they live in. We appraisers and I mean all of us(cg & res) have the tools to perform assignments that fall well outside that Lending world Box. That's how you should look at the entire picture if you want to survive far into the future(you'r remaining economic life). BRN has a lot of Remaining economic life whereas I have one foot out the exit.

USDA has its own set of foibles when it comes to this valuation problem. I am not sure how to deal with it on a SR2 , but SR1 is not a real problem. I.E swimming pools located on the Subject site. Weird, but its not weird when you consider THEIR MANDATE. In other words their sole purpose of their existence. Providing affordable housing and financing in Rural Areas.

Appraisal Requirements for USDA | USDA Loan Requirements

Appraisal Requirements for USDA, Restricted to rural and semi-rural areas deemed by zip code and map. If you want to buy a home in an urban area we have $0.

www.usdaloansdirect.com

Acreage: One of the great things about USDA they do allow you to buy a home with more acreage than a conventional or FHA loan. Generally they like to keep it at 10 acres or less. There is no maximum acreage limit. However, the land cannot exceed more than 30% of the total appraised value.

The above is a loan condition not an Appraisal Problem. So you have the same problem with them, but In this case you are writing the obituary for the USDA

USDA recognize this potential problem for them considering their mandate. They have a solution for that also: Farm & Ranch: For large acreage properties we do these as well. If you are interested to purchase a large farm or ranch income producing property we specilaze in these as well.

All of the above are conditions of making a mortgage loan. None of the above allows you the appraiser to ignore USPAP/FAQ's and Appraisal theory & methodology.


Essentially this is a lender/FNMA/usda/FHA/etc etc problem that THEY MUST SOLVE!

If you want to light a fire under them, then write a letter to your State Appraisal Board. If your board is as good as my board this fire will turn into a Bonfire and spread across the nation.

Well my early morning soap box is not really a substitute for a running/jogging to stay physically fit, but does get the blood flowing in my head.

 

[J Grant]

Carniivore-Acreage: One of the great things about USDA they do allow you to buy a home with more acreage than a conventional or FHA loan. Generally they like to keep it at 10 acres or less. There is no maximum acreage limit. However, the land cannot exceed more than 30% of the total appraised value.

The above is a loan condition not an Appraisal Problem. So you have the same problem with them, but In this case you are writing the obituary for the USDA
Essentially this is a lender/FNMA/usda/FHA/etc etc problem that THEY MUST SOLVE!


FHA, UDA, and FNMA are each loan programs with their own set of what they will or will not accept regarding land or excess land. They are, as you said a loan condition, not an appraisal problem So we are appraisers ,we solve appraisal problems. Who are we to tell them what they can and cant lend on! (other post you said FHA is right and Fannie is wrong).

These are not dueling appraisal methodologies, they are different loan programs , each informing an appraiser what they will and will not lend on .

None of them tell an appraiser to lie or violate USPAP. (and appraiser should not do that anyway) The above USDA does not tell an appraiser to make the land value of the total 30% or less, it tells appraiser it USDA will not lend if the land exceeds more than 30% of the total appraisal value.

So if an appraiser is valuing a property for a USDA loan and the land value in appraiser's opinion is 50% of the total, appraiser should keep it at 50% ( and the loan will be denied ). Appraiser should not lie and say on report the land is worth 30% in their appraisal in that situation

 

[Carnivore]

I have no idea how you arrived at your last post comments in response to mine.

The major point of my post was simply; this is a fairly universal problem due to the Standardized FNMA Format. Each entity seems to have there own twist.

FHA seemed to have the best and most workable solution.

 

[J Grant]

I have no idea how you arrived at your last post comments in response to mine.
The major point of my post was simply; this is a fairly universal problem due to the Standardized FNMA Format. Each entity seems to have there own twist.
FHA seemed to have the best and most workable solution.

When you say The FNMA standardized format , does that mean a URAR form? Not sure how that creates a universal problem.

FHA does not have a best and most workable solution to how to appraise.
FHA simply does not lend on excess land, including when the excess land is on same deed/ legal, and their loan condition informs an appraiser how to address that ( the appraisal is for house on one lot only) , USDA will lend on total higher acreage amounts than the other programs. You posted these other programs which are interesting but not about the FNMA topic...okay the thread will get longer! .

 

[Econobot]

look earlier in this and the other thread, certain posters insisted it could NOT be done- now those same posters either went quiet or act as if they never said it.

It can be done under the hypothetical condition that the 2 parcels are merged.

 

[J Grant]

It can be done under the hypothetical condition that the 2 parcels are merged.

It can be done that way but unlikely a lender would accept it. for the reasons that a HC made like this would likely be rejected, and it would legally force the 2 parcels to "merge", which is not the loan program for FNMA. The loan program for FNMA is they lend on two legal parcels that do not merge, they lend on 2 parcels that remain as 2 parcels, conveyed together for one price.

 

[Mr Rex]

Conveyed and encumbered as one. So worst case, Fannie has to allow the borrower to sell the other lot down the road and modify the loan to reflect the release. Not a lot different than an oversized single lot with potential to subdivide in the future.

 

[Carnivore]

I surrender!