FHA APPRAISAL FAQ 08/13/2012
Subject: FHA wood stoves must be LEGAL/Compliance confirmed!
How should I categorize a heating system that burns wood pellets? FHA requires a permanently installed back up conventional heating system that maintains a temperature of at least 50 degrees Fahrenheit in areas containing plumbing when the primary heat source is from a solar system or a wood burning stove. An acceptable conventional heating system would include one that burns wood pellets provided the system:
[FONT="]·[/FONT]heats the living areas of the home to a minimum of 50 degrees Fahrenheit; [FONT="]·[/FONT]is permanently installed, safe to operate and provides healthful and comfortable heat; [FONT="]·[/FONT]relies upon a fuel source which is readily obtainable within the subject’s geographic area; [FONT="]·[/FONT]has market acceptance within the subject’s marketplace [FONT="]·[/FONT]operates without human intervention for extended periods of time; and [FONT="]·[/FONT]is in compliance with any local codes and regulations governing such.
Note: Appraisers must adequately describe the system; its location within the home; its adequacy in maintaining healthful heat; and demonstrate market acceptance of the system within the appraisal report.
Two Unit Properties - Q In Hawaii and Florida it is quite common to have two-unit properties where there are two single family (unattached) homes on one property? We have been told that HUD denies this type of property even though they have a high value. FHA does accept two unit properties comprised of two detached or unattached dwellings on one property provided it is a single real estate entity having a legal use.
Can you please provide a definition of Accessory Dwelling Unit? An accessory dwelling unit (ADU) is defined as a habitable living unit added to, created within, or detached from a primary single-family dwelling and contained on one lot. ADU’s are commonly understood to be a separate additional living unit, including kitchen, sleeping, and bathroom facilities. ADU’s are subordinate in size, location, and appearance to the primary home and may or may not have separate means of ingress or egress. An attached unit contained within a single-family home, also known as a "mother-in-law apartment," or a “garage apartment” that may or may not be attached to the primary residence are the most common types of accessory dwelling unit. An accessory dwelling unit sometimes involves the renovation of a garage, basement, or a small addition to a primary residence. The determination of whether or not an ADU is a second dwelling unit is to be made by the appraiser and indicated in the site analysis section of the report where zoning, highest and best use, and legal use are addressed. The fact that an ADU is rented or generates income should not categorically result in a determination that the property contains two dwelling units.
Inspections & Certifications, Continued
13 NEW FAQ How should an empty or non-functioning in-ground swimming pool be treated? Does a swimming pool require perimeter fencing?
An empty swimming pool can pose a health and safety risk. At minimum, swimming pools must comply with all local ordinances (perimeter fencing, covers, etc.) and, if empty or non-functioning, the pool must be secured by a cover that would be sufficiently sturdy to prevent a pe rson from falling in the pool or through the cover. Non-functioning pools (and related equipment)which are not covered must be repaired. Swimming pools whose sides are unstable must be repaired or removed and the surrounding land re-graded. If adverse weather conditions prevent completion of required repairs, the lender should follow the guidance provided in Chapter 4, Section 4.6.d in Handbook 4155.2, Escrow of Funds for Completion of Construction.
Inspections & Certifications
001 Does the appraiser determine what inspections are required or does the lender determine that?
Mortgagee Letter 2005-48 provides examples of property conditions that will continue to require automatic inspections. The appraiser should note what inspections, if any, are customary for the area, required by state or local law, or that are recommended based on observed property conditions.
Lenders must review the appraisal to determine whether the appraiser has reported any property conditions that affect the health and safety of the occupants, or the security and the soundness of the property, and must require Immediate repair or inspection where the property condition poses a threat to these criteria.
Inspections & Certifications, Continued
006 Who completes a final inspection? Is a final required? Does the appraisal constitute a final? Will the lender’s certification on the 92900-A, page 3 suffice for a final inspection? If there is a Bldg Permit and CO is a final required?
The final inspection may be completed by anyone the lender selects for those cases processed under the guidance of ML 01-27 (Lender to Certify), otherwise the final inspection must be done by an FHA fee inspector. Under these scenarios the lender's certification provided via form HUD-92900-A would suffice as a final inspection.
The appraisal may constitute a final for a newly constructed property that is 100% complete on the date the appraiser visits the property, however, page 3 of form HUD-92900-A is still required to certify completion and compliance with HUD requirements and local building code.
