- Jun 18, 2003
- Professional Status
- Retired Appraiser
Desk review of an FHA appraisal. Comps good, value is reasonable and supported. But, IMO, the report doesn't meet FHA requirements. This is from my supplemental comment page.
Deficiencies noted in the original report (scope of work for FHA/HUD assignments)
Intended use/users statement: The report under review did not identify the intended use as being to support underwriting requirements for an FHA-insured mortgage. Reference: ML2005-48, Appendix D, Page D-7. HUD/FHA was not identified as an intended user. Reference: ML2005-48, Appendix D, Page D-8.
Photos: The photos in the report under review did not include front and rear taken at opposite angles to show all sides of the dwelling. The street scene does not show a portion of the subject lot. Reference: ML2005-48, Appendix D, Page D-13.
Highest and best use: Support and rational for the opinion of highest and best use was not summarized. Reference: USPAP 2-2(b)(ix).
Location: The location was marked as "Suburban" in the report under review when it is clearly "Urban" (located in a city). ML2005-48, Appendix D, Page D-17.
Neighborhood boundaries: The report under review has described neighborhood boudaries as "West of Hwy 101 and east of the hills." This description is too general and includes many neighborhoods within the city which have different characteristics, appeal and property values. Due to limited sales in any given year in this small, incorpoated city located in an otherwise rural region, it is common practice by appraisers to included sales data from competing neighborhoods. The report under review has used such data and this is acceptable. The neighborhood should have been described in more detail and narrative comments used to describe competing locations as being a part of the overall market. ML2005-48, Appendix D, Page D-18.
View: Page 2 of the report under review has reported the view as none. This is unacceptable for an FHA appraisal report. ML2005-48, Appendix D, Page D-19.
Functional Utility: The report under review lists "Functional Utility" as "Three bedroom" and "similar" for the comparable sales. The protocol for this field is to enter "Average" "Superior" or "Inferior." ML2005-48, Appendix D, Page D-31.
Estimated REL: The report under review has reported the REL as being 70 years. This is not a reasonable number for a structure of "Average" quality that is already over 50 years old. Published cost sources such as Marshall & Swift state that the total economic life of a residence of average quality is 50-60 years.
Lead based paint: The scope of work of this review assignment did not include a physical observation of the subject property or the comparable sales and listings. The reviewer has observed digital color photos of the subject. It appears that there are defective paint surfaces to the wood trim work of the residence at the rear elevation above the concrete block siding and defective paint surfaces to the door of the detached garage. This may simply be a matter of the way the photographs appear in a .pdf file or it may be that the condition was not reported correctly. The reviewer cannot determine this without an onsite inspection. If there are defective paint surfaces than inspection and repair of the condition is required.