FHA Roof

[Wyoming]

FHA appraisal and subject has 3 layers of shingles and is leaking. HUD says it needs to replaced and the appraisal should have CB3 “Subject to the following repairs or alterations on the basis of a hypothetical condition that the repairs or alterations have been complete." My question is first: Do i give the subject the value as if it had a new roof? and Second: Do I report on the 1004 form under exterior description > roof surface that the roof is new? I thought the answer to both was yes but an underwriter disagrees. I looked through App. D and 4150 but couldn't find an answer. I would like any input but would really like a quote from HUD on this to send the underwriter. Thanks.

 

[liberated]

For this scenario, I always comment (+ provide pictures) on the current condition of the roof under the "condition of improvements" comments and make the appraisal "subject to"; however, I do not make an adjustment on the sales grid as the appraisal has been made "subject to".

 

[Matt Mattina]

The value is based on the new roof (based on the hypothetical condition that a new roof exists). To be credible using a hypothetical condition (i.e. contrary to what exists) it is necessary [for lending uses] to describe the current "as is" condition, so as not to create a misleading report.

 

[Riick]

The value is based on the new roof (based on the hypothetical condition that a new roof exists). To be credible using a hypothetical condition (i.e. contrary to what exists) it is necessary [for lending uses] to describe the current "as is" condition, so as not to create a misleading report.

I'm confused. Are we using English here ?
If I put in the hypothetical condition of a new roof
it would appear logical to me, to clearly note the
AS-IS condition of the property, and, in the GRID
(( if it were necessary to adjust for the roof condition,
or if you were to include new roof in an overall condition adjustment ))
to adjust AS-IF the new roof were already in-place.
Is that what you're saying??

 

[Mr Rex]

The appraisal is made subject to the repairs. Thus the value is based on the subject having a new roof.