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FHA New Construction Appraisal

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Doug in NC

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
I am working on a plans/specs appraisal for FHA. What do I need to do different on new construction that I don't do on an FHA resale? I have done FHA assignments before, but never new construction that I can recall.

I read that filling out VC sheets and "Get Yourself a Home Inspection" forms are not necessary on new construction (by visiting HUD's site). Are systems checked prior to closing, once power has been turned on? What if water has not been turned on prior to my final inspection? I also recall something about having to sign plans and return with appraisal?

Your assistance would be appreciated. Thanks.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
For any house less than 1 year old, youv'e got to have ALL plans and specs, cost analysis, and a plot plan. A rough hand drawn plan, or a page ripped out of a plans book won’t work. And the LENDER is to provide all of this data to you..... “get it from the builder” is not an acceptable excuse.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Doug,

What you need is FHA's "tree killing special." I've never seen a lender or a builder get it right yet. You should have: The DOM forms (4 pages), the plans/blueprints, The Builder's Certification form, and a host of other sundry items that you will never see like heat loss calculations, truss certifications, plumbing diagrams, etc--stuff that really makes no sense at all. Oh, and a plot plan showing the final elevations and grading away from the foundation.

You will be lucky to get the DOM's, the plans and the BUilder's Cert. Review the builder's cert for accuracy paying attention to train tracks, main highways, etc. If you find the builder has marked an item incorrectly call it to the DEU's attention.

Make sure you do a Cost Approach on a national form like MS 1007, cite the pages for the costs you used and attach it to the report. You don't have to do the VC sheets or the Homebuyer Summary form.

Next, if the home is complete at inspection and has a CO issued, then it is existing and you will have to do the VC sheets, HBS form and the Cost Approach on the MS 1007.

If the home is complete and no CO is issued, it is still under construction to HUD. If it is still under construction, you don't have to test any systems. The FHA fee inspector will do all that prior to closing. You, the appraiser, should not complete the final inspection for FHA.

Ben
 

Darrell Hignite

Sophomore Member
Joined
Jul 16, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
HUD says the the VC sheets are not necessary for new construction, but I teach that all FHA appraisers should do VC#1 because they must decide if there is a tower or electrical lines in the fall zone, etc. The other VC's are not necessary on new construction, but all appraisers should do VC#1.
 

jeff samolinski

Senior Member
Joined
Apr 18, 2003
My HUD manual says you need: builder's plans, specs and construction documents, completed builder's certification(form HUD-92541, builder's warranty(form HUD-92544), 10 year warranty and all reports and info available(ie sales agreemnet, title report, environmental assessments studies and isnpection reports.

I think the warranty requirement may have changed though. reference HUD manual 4150.2 page 4-4.
 
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