Comp over 12 months

[RustNeverSleeps]

FHA appraisal, very limited comps so I added a 4th that is 14 months old to bracket the subject GLA. AMC came back and said comps older than 12 months cannot be used and remove it from report. Nothing in the SOW that says this.

Does FHA have any guidelines regarding this? I have found nothing on this in handbooks or QA. Thanks

 

[RustNeverSleeps]

Ok, I just found this in HUD 4150.2, 4-6A

Consider the amount of time that has elapsed between the sale date and the effective date of the appraisal. Sales data should not exceed six months between the date of the appraisal and the sale date of the comparable, and must not exceed twelve months. An explanation is required for sales dates in excess of six months.

Also found this in the FHA Appraiser Violations Matrix - Example of Comparable data violation; Comparable sales over 12 months old.

Why would it be this restrictive? Not every neighborhood is cookie cutter with plentiful data

 

[Mary Tiernan]

I agree with you - when there are less than 6 sales in a market in the past 12 months, it is sometimes necessary to exceed 12 months - did it before this HVCC and Dodd/Frank bull -

your 4th comp is supportive of the value - i guess you could put it in the addendum in a summary format - and only provide three sales then.

next stip - please provide a 4th comparable - there are no other comaprable sales - letting lender guidelines interfere with the appraisal process is what is wrong with this industry.

 

[RustNeverSleeps]

Great idea Mary, I'll discuss it the addendum

 

[Scott R Marshall]

Rust,


My understanding is that comps 1 through 3 cannot exceed 12 months. Comps 4+ can be as old as dirt. Having said that, this is another perfect example of restrictive requirements. Myself personally, I would be much more prone to decline the assignment if I did not have adequate comps which had sold within the last 12 months then include non-comparable sales simply to meet a requirements for FHA/HUD. Not my problem that their requirements make it impossible for certain properties to get financed but I will not place either my license of my status on the FHA roster in jeopardy by including garbage data simply to meet a requirement.

 

[Lloyd Bonafide]

HUD does say don't use sales over 12 months. I would find another comp. For a conventional or jumbo assignment I will occasionally use a sale over 12 months in an unusual situation, but for FHA I wouldn't do it.

 

[RSW]

I believe the correct process is to contact the DEU and inform them that it will be necessary to use sales over 12 months old. They can approve the use of the dated sales over 12 months old.

 

[Delta85]

We are required to use the best comps available. If the very best comps are older than 12 months I think we can use them. We just need to explain in a detailed way why the comps used were the best and how limited recent sales are.

 

[Metamorphic]

Also, as a 3rd path solution. You might go hunting for something with some accessory GLA on the property, like a guest house, apartment over the garage, mobile on site, etc.

 

[CANative]

How come no one actually looks these things up?

See pages D-6 and D-7 in appendix D to the 4150.2...

Only closed (settled) sales may be used as comparable sales 1, 2 or 3. If a sale is over six months is used, an explanation must be provided.

No sales over one year old are permitted except as “additional comparable sales” and would be identified as comparable sale(s) 4, 5 or 6. Properties under contract may be also be submitted as additional comparable sales 4, 5 or 6 to support trends or value conclusions observed.