FHA Excess Land, Which site size in the grid

[Tom D]

depending on the area the extra lot could have a good value. happened in this city with gentrification when a certain point of rehabing happened those worthless lots went above $100,000. if your deed has 2 separate legal descriptions then it's an easy split off. however, bot sites will be encumbered by the loan being on one deed. i would go with 1 lot on both pages with an explanation of the deed, via the legal.

 

[J Grant]

depending on the area the extra lot could have a good value. happened in this city with gentrification when a certain point of rehabing happened those worthless lots went above $100,000. if your deed has 2 separate legal descriptions then it's an easy split off. however, bot sites will be encumbered by the loan being on one deed. i would go with 1 lot on both pages with an explanation of the deed, via the legal.

In FHA they do not want the appraiser valuing the excess lot no matter how much value it has, or whether it is on one deed with the primary lot, or whether it is being transferred to the buyer in a sale transaction

The appraiser should disclose of course that there is excess land with a site that could be severed included in the sale, however, per FHA's instruction the excess land is not included in the appraisal market value opinion. It is an HC, of a kind..

The OP seems to understand that and is mainly asking a reporting question about how to report the site size on the grid -

 

[Dublin ohio]

depending on the area the extra lot could have a good value

Which brings up the question. Is there a demand for lots in the OP's subject neighborhood.

 

[Dublin ohio]

happened in this city with gentrification

Off topic. But speaking of gentrification. Read an article about upcoming school levy. Debate put on by local Black Caucus to discuss proposed levy. Gentrification came up. One of the comments made by an black woman was “Give me a reason I’m going to be charged because white people are moving into my community". I had to read it twice to make sure I read it right.

 

[ZZGAMAZZ]

I have never done an FHA appraisal where it was excess land is included in the sale, but if I did, and assuming the FHA instruction is still not include it,
I would put in 12,500 as the lot size for the subject since that is what is being valued. (and explain an additional 125,500 excess land lot is included in the sale )

If you choose to put in 25,000 SF , and put zero as the adjustment, then explain that only the primary lot of 12,500 SF is being v valued per FHA and that was no adjustment is applied.'

Have you looked up for yourself the FHA direction wrt excess land?

Whoa. Doesn't the appraiser need to determine the surplus/excess dichotomy of every comp before making adjustments? I don't know that any reg says you must do so, but the analysis doesn't seem otherwise to make any sense to me. Also, isn't the surplus/excess decision based upon results of the HBU analysis as well?

 

[J Grant]

Whoa. Doesn't the appraiser need to determine the surplus/excess dichotomy of every comp before making adjustments? I don't know that any reg says you must do so, but the analysis doesn't seem otherwise to make any sense to me. Also, isn't the surplus/excess decision based upon results of the HBU analysis as well?

Surplus or excess describes what exists, regardless of the HBU or value. Our HBU is an analysis. The facts about the lot are the facts, and is there an excess divisible /buildable lot is a fact per zoning, size, and road access of the lot.

HBU of the execs lot is irrelevant for FHA financing ( which is the topic ) For FHA exclude the value of the excess lot , it does not exist in the valuation portion.

 

[ZZGAMAZZ]

Surplus or excess describes what exists, regardless of the HBU or value. Our HBU is an analysis. The facts about the lot are the facts, and is there an sts divisible /buildable lot is a fact per zoning, size, and road access of the lot.

HBU of the execs lot is irrelevant for FHA financing ( which is the topic ) For FHA exclude the value of the excess lot , it does not exist in the valuation portion.

How can it not exist in the valuation portion, which I think you mean the SCA? Maybe I just don't understand your comment, although IMO the entire report is similar to a crossword puzzle because every section must correspond to the other sections (not necessarily on a dollar/dollar basis).

And if one speaks of "zoning, size, and road access," aren't those the components of two of four HBU tests?

Maybe/probably just me not understanding the basics.

 

[Dublin ohio]

How can it not exist in the valuation portion, which I think you mean the SCA? Maybe I just don't understand your comment, although IMO the entire report is similar to a crossword puzzle because every section must correspond to the other sections (not necessarily on a dollar/dollar basis).

And if one speaks of "zoning, size, and road access," aren't those the components of two of four HBU tests?

Maybe/probably just me not understanding the basics.

As far as FHA is concerned. The excess land is "invisible" in the valuation process. It is that simple.

 

[J Grant]

How can it not exist in the valuation portion, which I think you mean the SCA? Maybe I just don't understand your comment, although IMO the entire report is similar to a crossword puzzle because every section must correspond to the other sections (not necessarily on a dollar/dollar basis).

And if one speaks of "zoning, size, and road access," aren't those the components of two of four HBU tests?

Maybe/probably just me not understanding the basics.

Unique to FHA , the FHA has an assignment condition not to give any value to an excess lot in an appraisal.

Describe in narrative comments the subject has excess land of lot X and it is transferring as part of the sale however it is not accorded any value per the FHA assignment condition instruction.

 

[ZZGAMAZZ]

Unique to FHA , the FHA has an assignment condition not to give any value to an excess lot in an appraisal.

Describe in narrative comments the subject has excess land of lot X and it is transferring as part of the sale however it is not accorded any value per the FHA assignment condition instruction.

Yes of course. But how can one make adjustments in the SCA without knowing and making equivalent line item "lot" adjustments, without conducting the same analysis for the comps, especially in the scenario when the lot value might be 30% or more of the total value, in assignments in which the subject lot is similar in size to the comparable lots.