• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

FHA ?

Status
Not open for further replies.

joycedconner

Freshman Member
Joined
Feb 7, 2008
Professional Status
Certified Residential Appraiser
State
Washington
I inspected a property for an FHA appraisal and one of the garage stalls had been finished into living area by the previous homeowner, however, a building permit was not obtained. What is the protocol for this? I didn't include the GLA in the appraisal and explained the situation but I was told that the addition makes the property non compliant with FHA guidelines. I've read the FHA guidelines twice and cannot locate any comments about this. Help!!! Also, the bank has requested that I have 5 years minimum licensed appraisal experience after the report was sent to them. I have 21/2 years of licensed experience and 21/2 years of apprenticing. Can they require this after the approval for the loan?
 

ZZGAMAZZ

Elite Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
You didn't hear it from me because I'm a newbee (forever) but the skinny on the street is that failure to acknowledge additions/conversions done in workmanlike manner, etc., for FHA assignments could result in the appraiser's certification being revoked by HUD.

If you are one of those appraisers who prefers to refrain from determining market reaction to non-permitted areas, you have a decision to make, and there is no FHA liability shield of which I am aware.

(just my opinion based upon limited experience...)
 

joycedconner

Freshman Member
Joined
Feb 7, 2008
Professional Status
Certified Residential Appraiser
State
Washington
FHA appraisals

I did disclose the added GLA but I didn't give it any value. I explained that it did not appear that there was a bldg permit so it was not included in the GLA of the home. In addition, Fieldstone Bank is also saying that they will not accept an appraisal from me because I haven't been licensed for 5 years. Now, I'm FHA approved, have been a Licensed Certified Appraiser for the past 2 1/2 years and I've completed over 1,700 appraisals and now, after they send over the letter of approval for the loan, they decide that I don't have enough experience and reject the appraisal?? Is that even legal??

You didn't hear it from me because I'm a newbee (forever) but the skinny on the street is that failure to acknowledge additions/conversions done in workmanlike manner, etc., for FHA assignments could result in the appraiser's certification being revoked by HUD.

If you are one of those appraisers who prefers to refrain from determining market reaction to non-permitted areas, you have a decision to make, and there is no FHA liability shield of which I am aware.

(just my opinion based upon limited experience...)
 

Bama Bayou

Senior Member
Joined
Oct 19, 2006
Professional Status
Certified General Appraiser
State
Alabama
I did disclose the added GLA but I didn't give it any value. I explained that it did not appear that there was a bldg permit so it was not included in the GLA of the home. In addition, Fieldstone Bank is also saying that they will not accept an appraisal from me because I haven't been licensed for 5 years. Now, I'm FHA approved, have been a Licensed Certified Appraiser for the past 2 1/2 years and I've completed over 1,700 appraisals and now, after they send over the letter of approval for the loan, they decide that I don't have enough experience and reject the appraisal?? Is that even legal??

In my market it would most likely have value since the codes are not inforced and I have yet to see an unpermited addition be taken down, and that includes high rise condos that have a few more floors than the permit allows. Depends on the market. Just disclose, disclose, disclose, and disclose some more.

The loan approval is not your business, and yes, they can ask for as much experience as they like. They still owe you the fee if they have not paid you.

You may as well get used to it. When I first started in this business it was not at all unusual for lenders to ask for at least five, and sometimes ten years of experience. I also made 13K the first year, but I didn't get into it for the money. I was confident that experience and education would make me more valuable, and until the last seven years or so that was true. It's hard for me to feel sorry for the newbees. My income went down during the "boom" while others ruined the appraisal profession by inflating values hundreds of thousands of dollars for a $150 fee. I am now helping to clean up the mess they left behind, kind of like the guy at the circus who walks behind the elephants, but the money is good.

The worst offenders in this business have been those newly licensed/certified (last seven years or so) and the more experienced appraisers who poorly vetted and trained them. I'm sure you don't fall into that category so it's not your fault, but you can expect this more and more often as time goes on.

I have over twenty years experience and I am having my best year since 2003. It was hard to find good clients between then and about a year ago because there were so few of them. The lenders have/are learning a hard lesson.

Hang in there if you really love this profession. Make your reports the most highly documented and well written in your market. You will survive and then prosper, which is about the best you can hope for.
 
Last edited:

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
I do know HUD will not loan on an illegal use. But a residential addition to a residential property is not an illegal use, it is a non-permitted addition and is a code enforcement issue. HUD says this about code enforcement:

3. Code Enforcement for Existing Properties: As stated in HUD Handbook 4150.2 HUD has neither the authority nor responsibility for enforcing code. This rests with the local municipalities

And says nothing else. That to me says it is up to the market to decide if the addition has value and at what rate. HUD simply isn't in the business of enforcing code.

As far as the report being handed in and you not having 5 years experience, is one of your former supervisors FHA approved where they might be willing to review and sign as a supervisor for you?
 

joycedconner

Freshman Member
Joined
Feb 7, 2008
Professional Status
Certified Residential Appraiser
State
Washington
Well, that's about all I could find out too. I would have added it because I also felt it should depend on the markets reaction to such an addition but I called the appraiser who trained me and he said that the current homeowner has to get the addition approved as per HUD guidelines so that's when I wanted to dig into this deeper. Unfortunately, the banks will also not approve an appraisal that has been signed by a supervisor. I guess in some ways I should be very grateful that I got into the business when I did because I have no idea how the trainees are able to get work anymore. Thanks for all your awesome help. Have a great night!
 

joycedconner

Freshman Member
Joined
Feb 7, 2008
Professional Status
Certified Residential Appraiser
State
Washington
I agree with you 100% and when I started in this business, 5 years ago, I swore to myself I would be proud of this profession and not be another "prostitute appraiser". I'm glad in some ways that all this happened because I think it weeds out the bad appraisers, but unfortunately, some of us "newbys" are also paying... I'm determined to uphold my name to a higher standard than what has been in the past 7 years. I'm a member of the Appraisal Institute and I try to gain as much knowledge as I can about appraising. That's what I love about this job. You never stop learning. Well, we shall see what the future holds for all of us. Thanks again for all your great advice!
 

Bama Bayou

Senior Member
Joined
Oct 19, 2006
Professional Status
Certified General Appraiser
State
Alabama
I agree with you 100% and when I started in this business, 5 years ago, I swore to myself I would be proud of this profession and not be another "prostitute appraiser". I'm glad in some ways that all this happened because I think it weeds out the bad appraisers, but unfortunately, some of us "newbys" are also paying... I'm determined to uphold my name to a higher standard than what has been in the past 7 years. I'm a member of the Appraisal Institute and I try to gain as much knowledge as I can about appraising. That's what I love about this job. You never stop learning. Well, we shall see what the future holds for all of us. Thanks again for all your great advice!

I started in a market that soon went south, and while it's no fun while it's happening the ones who make it during the bad times end up doing well later. Don't get discouraged and hang in there, we need really good "new" appraisers now as much as ever.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
As far as the report being handed in and you not having 5 years experience, is one of your former supervisors FHA approved where they might be willing to review and sign as a supervisor for you?

FHA is single signer only. The FHA assigned appraiser must inspect the property, complete the report and sign as the appraiser.

I did disclose the added GLA but I didn't give it any value. I explained that it did not appear that there was a bldg permit so it was not included in the GLA of the home.

:shrug:
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks