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Fannie CA reporting requirements and HBU

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CANative

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Retired Appraiser
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California
From The Appraisal of Real Estate, 13th Edition...

When an appraisal report includes a market value opinion, the report must address highest and best use. Highest and best use as though vacant must be addressed in reports that include a market value opinion for the site as though vacant. Highest and best use as improved must be addressed in reports that include a market value opinion for the property as improved.

From Table 12.1 - Highest and Best Use Statements in Appraisal Reports, 3rd scenario...

If...
The property is improved but a separate estimate of land value is presented in the appraisal;

Then the report should include...
Discussion of the highest and best use of the land as though vacant as well as the highest and best use of the property as improved.

So if the appraiser reports a cost approach, does reporting the opinion of site value, which the form requires be reported in a separate section above the other cost data, mean that the appraiser should be reporting both types of HBU analysis?
 

Rufus

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Indiana
So if the appraiser reports a cost approach, does reporting the opinion of site value, which the form requires be reported in a separate section above the other cost data, mean that the appraiser should be reporting both types of HBU analysis?

I read it as though that is the intended meaning. Although the word 'should' muddles it a bit.
 

jay trotta

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Certified Residential Appraiser
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Connecticut
didn't I read somewhere not that long ago in another FHA/FNMA that the CA is no longer required ? How does that impact the HBU ?

ya just gotta luv this business......it's grey and it does matta; How would you think the HBU and the CA have impacted the imploding Mortgage Industry today ?

What do you think the impact is down on Wall Street, regarding the HBU & CA ?

The adverse impact on the Mortgage industry right now and over the past 5 years, has absolutely nothing to do with HBU & CA - it does have to do with Greed & Misleading information provided by rating companies.
Zoning is not "absolute"....it is grey matta, that can change at any time - all one needs is a Variance and it can go from Residential to Commercial and beyond, given the proper presentation; time and of course money.
 

Mztk1

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Dec 3, 2006
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Certified Residential Appraiser
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Florida
I think it is a natural process when valuing the land in the cost approach. If you have to value it, you are going to be looking at the most similar lots available that are vacant, which includes considering zoning and the potential uses. I don't think it is anything to sweat over.
 

Couch Potato

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Mar 15, 2004
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State
North Carolina
I believe the position of AI is yes.
 

Smokey Bear

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California
OK Greg, what troublesome report are you trying to avoid now? LOLOLOL
 

Fred

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Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
When an appraisal report includes a market value opinion, the report must address highest and best use. Highest and best use as though vacant must be addressed in reports that include a market value opinion for the site as though vacant. Highest and best use as improved must be addressed in reports that include a market value opinion for the property as improved.
It might be of some use to note this standard exceeds what USPAP requires.
 
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