Duplex on a 1004?

[Alison Swain]

I have a lender who has requested that an assignment for a duplex be reported on a 1004 form. Is this kosher? Supposedly, this is not going to the secondary market. If allowable, should I put this on the old form?

 

[Midwest Guy]

SFR with one accessory unit?

 

[Lee Lansford]

SFR with one accessory unit?

Not if it is a legal 2-unit and that is the H&B Use.

 

[Anita Rimer]

I have reviewed duplex appraisals that were done on the 1004. They are usually completed by older appraisers that have never used the 1025 form.

Is this lender old school?

 

[CANative]

Not if it is a legal 2-unit and that is the H&B Use.

Why? What is a "legal 2-unit?" What is a "legal SFR with a legal accessory dwelling unit?" Is the HBU the same or different?

Is there a source one can use to make a definitive determination with clear descriptive terms?

 

[Alison Swain]

I'm doing the inspection on Sunday, so I'll let you know exactly what I'm dealing with.

Thanks for the input so far.

 

[JSmith43]

I'm doing the inspection on Sunday, so I'll let you know exactly what I'm dealing with.

Thanks for the input so far.

FHA used to prefer the old 1004 for duplexes, but would accept a 1025 of course. As I recall, FHA only insisted that you develop a GRM, but it has been a while. Now they insist on the 1025.

I bet that is this recollection that is the seed to this idea. Someone wants to save a buck

I don't see anything wrong with it, if the typical buyer of this property type relies primarily on the SC and the investor really doesn't care if the loan might ever be sold to an investor requiring conforming documentation. If not, you'll be adding on & adding on and adding on stuff

It would also help in the grid if the units were clones.

 

[Steve Wyrick]

In my opinion using a 1004 for a duplex is difficult the form is really not suited for the assignment. I am not saying it can't be done but it is difficult and can be very confusing. Personally I would not do it.

For example how are you going to report the GLA, both units combined with 6 bedrooms and 4 baths, with 2 separate two car garages.

The same applies to the comparables.

Personally I think the use of the form for a duplex could and would lead to a misleading report, so I would not use it. But that is just my opinion.

 

[OSU Beavers]

FHA used to prefer the old 1004 for duplexes, but would accept a 1025 of course. As I recall, FHA only insisted that you develop a GRM, but it has been a while. Now they insist on the 1025.

I bet that is this recollection that is the seed to this idea. Someone wants to save a buck

I don't see anything wrong with it, if the typical buyer of this property type relies primarily on the SC and the investor really doesn't care if the loan might ever be sold to an investor requiring conforming documentation. If not, you'll be adding on & adding on and adding on stuff

It would also help in the grid if the units were clones.

Yep, our first house had a basement apartment so we had to get an FHA duplex loan to purchase it in 1994. The appraiser wrote it on a 1004.

Now days if it was originally built as a multi family then I would use the 1025 form.

Hi Rodger, long time no see. Glad that you are still around.

 

[Mike Boyd]

FHA used to prefer the old 1004 for duplexes, but would accept a 1025 of course. As I recall, FHA only insisted that you develop a GRM, but it has been a while. Now they insist on the 1025.

I bet that is this recollection that is the seed to this idea. Someone wants to save a buck

I don't see anything wrong with it, if the typical buyer of this property type relies primarily on the SC and the investor really doesn't care if the loan might ever be sold to an investor requiring conforming documentation. If not, you'll be adding on & adding on and adding on stuff

It would also help in the grid if the units were clones.

Back in "the days," I did dozens of FHA duplex appraisals using the SFR form. Yes, you combine the square footage of both units as well as the room count.
If I were the lender I would require a rental analysis and an operating income statement.

Rodger, glad to see you. I was beginning to worry that, like many other mortgage brokers, you had abandonned ship.