FHA REO backing directly up to the Freeway...

[Caterina Platt]

Hi All!

Well, here goes another FHA question. FHA REO appraisal for a manufactured home in which the rear of the home is estimated to be 20 yds. or so from Interstate 40. At this portion of the freeway, there are 4 lanes in each direction at 65 mph. The noise level is enough to drive you nuts, no effective visual or sound barrier to speak of. The concrete block wall is about 4 feet high and the freeway is directly level with the home.

I know that we are not supposed to be technical experts in decibel levels, measurement of such, or for that matter, these kinds of judgement calls as to whether HUD should have made this loan or not. My research of HUD Clips docs led me to 24 CFR 51.103 which states the noise level should not exceed 65 decibels. Spiffy, so what level is this home experiencing I now ask myself? Wait a minute, says I. Shouldn't this be referred to an expert, or perhaps referred to a HUD official for final judgement call? Obviously, this would effect financing for the majority of this particular development.

There are probably 10 other dwellings in this immediate development effected in the same manner, and a townhome 1 block away (interstingly enough also sold FHA financing).

So my question, I suppose would be, how would you guys word your requirement in the VC for clearing? Which office or official of HUD would make this type of judgement call?

 

[Mountain Man]

Is the noise level soooooo high that it will greatly hinder the livability, make a normal convesation difficult, or would keep the occupants from sleeping?

You know what I mean. Like when you pull up to the red light, and the BOOM, BOOM, BOOM from the radio in the teenie-booper's car one lane over, drowns out the relaxing sounds from your car radio.
:evil:
THAT is too loud.

The only corrective measure I would know of is to get DOT to erect one of those pretty, metal walls (that you see in every downtown area) or recommend the owner plant some kind of sound buffering evergreen trees. :? Dunno, maybe should not have gone FHA in the first place.

 

[Caterina Platt]

Hey Mel (aka Daddy-to-be again!!)

I would imagine the wall or barrier required to eliminate excess noise in this case would far outwiegh the cost of the dwelling, and probably the cost of all the homes put together at this point. The residential properties just across the freeway have one of those 8 foot, high quality, concrete barrier walls that was installed as a part of one of the recent Federal Highway Improvement programs. At the time, these lots were undeveloped and no one thought to put the same on the south side of the Interstate. :roll: This is one of those situations where you really have to wonder if H & B use of the land was ever really analyzed, or if City P & Z should have required a barrier as part of the permit process.

As far as the scope of my job, my only concerns really are:

1) Should FHA have financed this in the first place?

2) Should this be eligible for future FHA financing?

3) Who at HUD makes this call?

I would not begin to require such a repair. I suppose the first thing one would need to determine is what exactly is the decibel level. Far outside the scope of an REO appraisal, and far outside my expertise.

The noise is pretty bad. Let's just say in your living room with all the doors and windows closed, you'd have to crank your TV pretty good to drown out the majority of the noise. The semi trucks would still bleed in over that. The kid's bedrooms and their windows are a mere 15 feet from the noisy back edge of the property.

As I type this, I'm really wondering if I hadn't ought to rethink my H & B use comments. Uh Oh! I feel myself digging one of those 'self-imposed appraisal problem' holes. Yikes! Help! Throw me a rope!!

 

[Wally Jones]

Caterina,

According to the HUD HOC Reference Guide, Chapter 1, HUD no longer has noise requirements for single family dwellings nor do they require noise assessment or acoustical analysis. For proposed or new (up to one year old) construction, they require a design engineer's study if the property is within 1000 feet of a high traffic road or within 3000 feet of a railroad.

In typical HUD fashion, they also say noise exposure alone will not necessarily be grounds for rejection of the loan by FHA (but they said they have no noise requirements?).

Now I reckon it's up to you to determine how the noise may affect marketability of the property. Any external obsolescence due to the highway?

Good luck. (Okay, I tried to throw you a rope but it may have an anchor attached! )

 

[Caterina Platt]

Thanks Wally!

So the HOC has changed this, eh? Geezow! Twould be nice if there were like ONE place where we could get all the pertinent data instead of searching umpteen conflicting documents, directives, Mortgagee Letters, 4150.02, yada, yada, yada.

But then, that would be asking a government entity to operate with some resemblence of efficiency, logic and order. Naah! Couldn't happen, could it?

 

[Wally Jones]

But, Caterina, that's why Wayne developed this Forum!!

He's actually subsidized by the gummint so we all have a single point of reference for all this good stuff and he's quietly collecting our hard earned tax dollars which he's frittering away on key lime pie and margaritas while lounging on the beach. :mrgreen:

 

[Ben Vukicevich SRA]

Caterina,

Read Section 2-2 in 4150.2. 8O 8O

Then be confused and complete the report. If it adversely affects marketability to the point of being unacceptable, then it's a reject? So are all the units occupied? Any boarded-up. How many are for sale? If none are for sale, it must be a viable area? Tme to explain exactly what you see in the immediate neighborhood backing up to the road. How about researching some old prior sales in the immediate area to see if prices are declining or appreciating? That maybe a help as to how the market perceives the affect of the highway. Oh boy, do you see where this is going? Damned if you do and damned if you don't.

Ben

 

[Ida S. Romo]

Caterina,

Re: your REO.....What happened in the past "whether HUD should have made this loan or not" is not your problem.

You said in your post that there were 10 other dwellings within the immediate development effected in the same manner.......are they sold??.......what was their marketing times?......If they sold in a reasonable time span.....they are marketable properties.

Explain all in your report and let the underwriter make the decision.

Re: Your next post.........#1. Not your problem.....#2. Not your problem, let the UW make the call based on your report.....#3. The UW........Here is your rope.........When one concentrates on problems of the past, one gets more of the problems.........Report all of your concerns and let the UW make the call.........You are the appraiser....not the person who decides on the reject or not......Your report will play a part in aiding the UW to make their decision reject or not.

Hope this helps

Ida

 

[Caterina Platt]

Thanks Ben and Ida!

Ben,

Well, we are of like mind on the process.... Unfortunately, this is fairly uncharted territory as far as having past data. These were all land/home sales of manufactured dwellings with no data made public (we're non disclosure). Even if this data were available, the land home sales are not arm's length deals. Fortunately, I did a townhome on the north side of the freeway about a month ago, so all the extraction data for external depreciation is current. There is one offering in the area, and it appears about 30% overpriced. One documented MH sale in this entire section of town. Very near the subject, pretty comparable neighborhood outside of the noise. A bank owned unit in good repair. Not the comp of choice, but nuttin' else there I tell you. Used two fair quality townhomes with similar noise issues and made a hefty 'Design' adjustment.

And you're right on the 'clear as mud' factor from the 4150.02. Tells you to reference document 24 CFR 51.103 for a detailed description of noise levels. Detailed alright. Not at all what the appraiser needs to be fooling with. I ended up marking 'Yes' and referred the call to 'an authorized agent of HUD for determination of future insurability'.


Ida,

Good to 'see' you. Seems like it's been a while. You have always been one of my favorite common sense and to the point ladies in here.

You're correct, it's not the appraiser's call to make. I caught myself before I made it too complicated. H & B use of the entire development may have been a good thing to look at 3 years ago, but now I am concerned with a specific lot within an area zoned for such. H & B use remains current use at this point.

As far as the questions I posed, I suppose my inquiring little mind needs to understand who, what and why. When should I be concerned about conditioning the VC, when would I be stirring unneccessary poop? One of these days it'll be me out there being asked to do the refi or sale valuation for FHA on that noisy little abode. The more familiar we are with what flies and what doesn't, the less we annoy our Realtor and lender friends by placing unneccessary requirements. Or worse, overlooking the neccessary ones out of ignorance.

Again, thanks!! This FHA thing may or may not kill me in the learning process. But like Wally said, thank God for 'Wayne's World'.

 

[Mountain Man]

I suppose my inquiring little mind needs to understand who, what and why

Yeah, I guess you and I suffer from the same dysfunction, :wink: wanting to protect idiots from themselves. :mrgreen:
Ohmygosh, I am starting to think like my school teacher wife. 8O
Good advise above to get us both back on track. :lol: