Older Appendix D:
Unacceptable Locations
FHA guidelines require that a site be rejected if the property being appraised is subject to hazards, environmental contaminants, noxious odors, offensive sights or excessive noises to the point of endangering the physical improvements or affecting the livability of the property, its marketability, or the health and safety of its occupants. Rejection may also be appropriate if the future economic life of the property is shortened by obvious and compelling pressure to a higher use, making a long-term mortgage impractical.
If the condition is clearly a health and safety violation, contact the lender for further instructions before completing the appraisal. The lender must clear the condition and may require an inspection or reject the property. If there is any doubt as to the severity, report the condition and submit the completed report. For those conditions that cannot be repaired, such as site factors, the appraised value is based upon the existing conditions.
Site Hazards And Nuisances
The appraiser must note and comment on all hazards and nuisances affecting the subject property that may endanger the health and safety of the occupants and/or the structural integrity or marketability of the property, including: subsidence, operating and abandoned oil and gas wells, abandoned wells, slush pits, heavy traffic, airport noise and hazards, runway clear zones/clear zones, proximity to high pressure gas, liquid petroleum pipelines or other volatile and explosive products, residential structures located within the fall distance of a high-voltage transmission line, radio/TV transmission tower, etc., excessive hazard from smoke, fumes, odors, and stationary storage tanks containing flammable or explosive material.
Soil Contamination
Check readily observable evidence of hazardous substances in the soil. Conditions that could indicate soil contamination include pools of liquid, pits, ponds, lagoons, stressed vegetation, stained soils or pavement, drums or odors. If any of these conditions exist further analysis or testing is required.
Note the proximity to dumps, landfills, industrial sites or other sites that could contain hazardous wastes.
If there is any readily observable surface evidence of leakage from an underground storage tank, further analysis or testing is required. If there is readily observable evidence of on-site contamination, make a requirement for further inspection in the site section of the report.
From 4150.2, Chapter 2
M. STATIONARY STORAGE TANKS
Stationary Storage tanks containing flammable or explosive
material pose potential hazards to housing, including
hazards from fire and explosions.
> If the property is within 300 feet of a stationary,
storage tank containing more than 1000 gallons of
flammable or explosive material, the site is ineligible.
Mark "YES" in VC-1 and return the unfinished appraisal
to the lender.
New vs. Old
The old made proximity to a gas station with a UST less than 300' ineligible even if no evidence (visual or known leaks and plums based on public reports) of soil contamination.
The new seems to allow the appraiser to decide based on visual observation (or presumably other information that is available.)
Always something new to learn on here