FHA Appraisals With Atypical Design Styles

[Nick1985]

I have an appraisal request for an A-Frame type property. I know FHA requires the first 3 comps to be within one year of the effective date with no hard limits on distance. Several times during FHA appraisals I have had 3 comps within a year and then added a 4th or 5th comp that is dated over 1 year for additional support.

Our market area is very rural and limited, so I think adding a dated comp can provide good additional support. In my area with the market being so limited, I typically state in all of my appraisal that I don't make adjustments for differences in design styles (ranch, cape COD, 2 story, etc..). Typically GLA and overall condition are the main driving forces of value. There just sometimes isn't enough market activity to find good comps that are all the same design style. Ranches, cape cods and 2 stories are all typical in the market area tho. What about when the design is atypical?

Does anyone have any experience or knowledge about regulations regarding providing comps with matching design styles.

The question is: When the design style is atypical, such as an A Frame with limited market representation, is finding another A Frame within 1 year a must? Or would differing designs styles be acceptable for all comps dated within 1 year with an A Frame support comp that is dated over 1 year? Comps would be comparable in GLA and features of course, just differing design styles. What would my peers do?

 

[J Grant]

Use what you have...if no A frame in a year , use the most similar in acreage/lot/location, sf, quality etc. See if you can find an A frame comp over a year old and use it as a fourth comp or comp 4 and 5 if can find 2. Ask are RE agents for market acceptance of A frame homes. my understanding of them is they are often a cheap method of construction or might have sloping ceilings on upper level? So more funky type comps might be appropriate.

 

[Terrel L. Shields]

experience or knowledge about regulations

There is no such restrictions from FHA but I never had a lender accept an appraisal without a style match for at least one comp. They might accept one with twice the GLA or 30 years older but you got an A frame, better have a match. You got a geodesic dome...find a sale with it.

I distinctly found style matters when A frame, Geodesics, log homes, and berm or underground housing...they bring less and are more difficult to finance.

 

[J Grant]

Make sure your comments match the subject. Appraisers get tripped up when they are appraising an atypical subject and then mark off subject is typical....( when it is not ) The reason lenders want to see similar design comps is they want an indication of market acceptance. In addition to price, are A frame houses selling in the same days on market range as other style houses.

So a comment such as " A frame houses are not typical for area, but there are some built and according to RE agents, they are market accepted and tend to sell in the prevailing 60-90 days market exposure, though they tend to sell in the lower range of value unless highly upgraded. No A frame similar A frame comps were found within a year or within a mile, therefore similar A frame design comp 4 is over a year old and A frame comp 5 is 10 miles away. "

 

[Nick1985]

Thanks for the input guys. I wouldn't turn in an atypical design style without at least one matching comp. That main question was just is it acceptable to FHA/Lenders/Appraisers if the only matching comp is dated over 1 year.

 

[Terrel L. Shields]

I'd go as far as I could to find one within a year...explain explain otherwise.

 

[Riick]

For your own peace of mind (given the data is there) you might want to go back 5-7-10 years and compare the *average* sale price and/or $/ft of A-Frame -vs- Other styles in a 5-10 mile radius of the subject. Once you do this, maybe a 1/2 hour exercise, if that, you can say, with a straight face, that this style sells at similar/higher/lower values compared to other styles.

The Sadistics courses I took back in college said minimum number of cases for a valid result was 20, but, *more* is better. So go back in time and outward in distance until you get a nice size sample.

 

[J Grant]

Thanks for the input guys. I wouldn't turn in an atypical design style without at least one matching comp. That main question was just is it acceptable to FHA/Lenders/Appraisers if the only matching comp is dated over 1 year.

yes, just explain none were found within a year.

 

[Michigan CG]

I know FHA requires the first 3 comps to be within one year of the effective date with no hard limits on distance.

I know that the above is not true.

 

[Nick1985]

I know that the above is not true.

Which part?