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FHA Report

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DebiNelson

Freshman Member
Joined
Jun 3, 2003
Professional Status
Certified Residential Appraiser
State
Illinois
I have ben given an FHA report to prepare where the subject directly sides to a Gas Station. The best I can find in the HUD handbook is that the subject cannot be within 300 feet of a stationary tank. I am obviousely within 300 feet altho the tanks are underground. Any help or suggestions would be appreciated. :(
 

hal380

Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
Hi Debi;

The best I can find in the HUD handbook is that the subject cannot be within 300 feet of a stationary tank. I am obviousely within 300 feet altho the tanks are underground.

The way that I read the FHA manual on stationary tank is that it is an above ground tank. HUD 4150.2, section 2 page 2-12 speaks about the hazzard of fire or explosion from a stationary tank. Underground tanks do not present the same degree of hazzard from fire or explosion.

I would suggest that a phone call to your local HUD service center could clarify this issue.

On the other hand, you should comment on the location of the subject as being adjacent to an operating gas station with underground tanks. It is up to the lender to satisfy themselves as to any environmental concerns they have.

Hope this helps

Hal
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
I've had this happen on 2 reports, not directly next door, but across the street and well within 300 feet of the subject.

I spoke with the HUD REAC center, and they said to call for the VC condition 1-L, and detail the issues within the body of the appraisal report, and on the VC sheets........both deals died since the properties were deemed "not elgible for FHA insurance"

My opinion is, and always will be with FHA.....if there is a question about anything like that, VC for it. The Underwriters have the ability to waive any condition we put in the report if they see fit to do so. Protect your butt, and let the other people worry about it. I've had lenders beg me to pull conditions for roof inspections, or well and septic tests, because they told me "the building inspection said it was ok"........The conditions will stay in the report, and the Underwriters can sign off on it - I'm not qualified in a lot of cases to do a building inspection, so I don't - leave it in the hands of the professionals.
 

hal380

Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
Right on the money MH, absolutly VC it, hope my answer was not misleading as to directly calling attention to the location issues.

I was trying to say that the buried tanks did not AUTOMATICALLY cause termination of the assignment, but that may happen at the underwriting level.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
The loan is definitely eligible for FHA financing. All you need is a signed letter from the buyer stating that he is aware of the gas station being within 300'. Any DEU worth their salt knows that trick and now all of you do too....now's your chance to tell an underwriter what to do :D :D :D

Ben.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Here's the actual HUD stuff for your review



11. VC-1 indicates that properties located within 300 feet of a stationary storage tank
containing more than 100 gallons of flammable or explosive material property are
ineligible. It is common to have oil, gas or propane tanks for residential heating purposes
that are typically in excess of 100 gallons within 300 feet of property (especially with
smaller lots). Is there a waiver procedure, or are these homes just ineligible?
HUD has increased the storage tank size to 1,000 gallons.
12. Please address the eligibility of properties located within 300 feet of a gas station.
This would not necessarily render the property unacceptable. The Direct Endorsement (DE)
Underwriter is required to provide a written disclosure to the borrower that the property is
located within 300 feet of a gas station.

Ben
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Call for the removal of the service station :rofl: :rofl: :rofl:
 

aprazer

Junior Member
Joined
Feb 27, 2002
Professional Status
Certified Residential Appraiser
State
New York
Here is a link that can be usefull.

http://www.epa.gov/enviro/wme/

This EPA site indicates known detrimental conditions like gas storage tank leakage. Worth checking when subject is that close.
 
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