http://portal.HUD.gov/hudportal/documents/huddoc?id=40001HSGH.pdf
.Appraiser and Property Requirements for Title II Forward and Reverse Mortgages (On June 30, 2016, this section will become section II.D)
PDF PAGE 508
.b. Application of Minimum Property Requirements and Minimum Property
Standards by Construction Status
i. Existing Construction
Definition
(A) Existing Construction refers to a Property that has been 100 percent complete for over
one year or has been completed for less than one year and was previously occupied.
Standard
(B) For Existing Construction, the Appraiser must notify the Mortgagee of the
deficiencies when the Property does not comply with FHA’s MPR.
ii. New Construction
Definition
(A) New Construction refers to Proposed Construction, Properties Under Construction,
and Properties Existing Less than One Year.
Proposed Construction refers to a Property where no concrete or permanent material has been placed. Digging of footing is not considered permanent.
Under Construction refers to the period from the first placement of permanent
material to 100 percent completion with no Certificate of Occupancy (CO) or equivalent.
Existing Less than One Year refers to a PropertY that is 100 percent complete and
has been completed less than one year from the date of the issuance of the CO or
equivalent. The Property must have never been occupied.
PDF PAGE 509
iii. Determination of Defective Conditions
Definition
(A) Defective Conditions refer to defective construction, evidence of continuing
settlement, excessive dampness, leakage, decay, termites, environmental hazards or
other conditions affecting the health and safety of occupants,
collateral security or structural soundness of the dwelling.
iv. Inspection by a Qualified Individual or Entity
If the Appraiser cannot determine that a Property meets FHA’s MPR or MPS, an
inspection by a qualified individual
or Entity may be required.
Conditions that require an inspection by qualified individuals or Entities include:
•standing water against the foundation and/or excessively damp basements;
•hazardous materials on the site or within the improvements;
•faulty or defective mechanical systems (electrical, plumbing or heating/cooling);
•evidence of possible structural failure (e.g., settlement or bulging foundation wall,
unsupported floor joists, cracked masonry walls or foundation);
•evidence of possible pest infestation;
•leaking or worn-out roofs;
or
•any other condition that in the professional judgment of the Appraiser warrants
inspection.
Appraisers may not recommend inspections only as a means of limiting liability. The
reason or indication of a particular problem must be given when requiring an inspection.
PDF Pg 533
iv.
Conditions Requiring Inspection by a Qualified Individual or Entity
The Appraiser must notify the Mortgagee and make the appraisal subject to an inspection
by a qualified individual or Entity when the observation reveals evidence of
a potential
safety, soundness, or security issue beyond the Appraiser’s ability to assess.
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Poster p.s.
1. Which governing Municipality?
2. Does the Municipality require not only Build Permit but an Inspection and Compliance Certificate / Cert. of Occupancy?
IN MUNICIPALITIES WHICH REQUIRE COMPLIANCE
Typically BPs are issued to allow specific construction or changes to existing structures to be done in compliance with Building Ordinance(s). Upon completion, Bldg or Bldg./Zoning officer (in some cases dual role) - inspects the improvements and determines whether or not the improvement meets and/or complies with Municipal Ordinances for both Building and Zoning.)
When completed in compliance with plans submitted and approved, the Muni issues a close-out Completion / Compliance Certificate which supercedes the prior building permit(s).
Further -
IN MUNICIPALITIES WHICH REQUIRE COMPLIANCE with Building and Zoning Ordinances/local/county/state (codes/laws) - building permits typically are dated and specify either one, or several, Muni Inspections
(for ex. when a substantial addition to GLA is done).
Subsequent to Municipal Inspection, when the improvement(s) meet(S) ordinance requirements and appear to have been completed in a professional, workmanlike manner by either a property owner or licensed building professionals (that can vary Muni by Muni) - a Certificate of Completion/Compliance/Occupancy is recorded and issued.
IN MUNICIPALITIES WHICH REQUIRE COMPLIANCE
Lack of required BP(s), expired BP(s) typically represent violations of local, county and/or state Laws - construction done which is deemed by the Municipality NOT to meet required Building Ordinances may be ordered to be removed or reconstructed to meet Code(s) to make a dwelling legally habitable.
