"As Is" Appraisal of "Property Undergoing Renovation"

[Mr Rex]

Just a follow up question, if answer to the question on Page-1 of URAR 'Is the HBU of subject property as improved (or as proposed per plans and specifications) the present use' is checked 'No'. Would that appraisal still be acceptable to GSEs? What are the consequences of doing it.

From your description its C6 so its not eligible for GSE funding.

 

[Randolph Kinney]

From your description its C6 so its not eligible for GSE funding.

That would mean it is, by definition of C6, not at its HBU.



C6: The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety, soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many or most major components.

Note: Substantial repairs are needed to the improvements due to the lack of adequate maintenance or property damage. It reflects a property with conditions severe enough to affect the safety, soundness, or structural integrity of the improvements.

 

[J Grant]

Just a follow up question, if answer to the question on Page-1 of URAR 'Is the HBU of subject property as improved (or as proposed per plans and specifications) the present use' is checked 'No'. Would that appraisal still be acceptable to GSEs? What are the consequences of doing it.

They would reject a property not at is HBU. But if you are wrong for checking this box, which imo you would be, the client could go after you for possible incompetence. As others have said, if the missing kitchen and bath items affect safe or soundness, then this house is a C6. and it will be rejected for c 6 or lender will come back and make it subject to making it from c6 to at least a c4. Better to have them reject this property for lending, if they are going to reject it, for the right reason...this is a condition issue, rather than a HBU issue (from what you described)

 

[Howard Klahr]

Would that appraisal still be acceptable to GSEs?

GSE's do not accept loans on properties under construction of any type. That does not mean that the origination lender would do the deal. Don't try to second guess the underwriting and just value the property.

without any Hypothetical Condition?

Hypothetical condition for what? "as is" is "as is" what part of that is hypothetical?

Great comps for this kind of assignment, (if u can find them) are flip sales.

Unless you have extensive information for each of the comps on exactly what repairs/renovations are necessary/planned, you would only be guessing when it comes to doing the adjustment