"Part B, Origination Through Closing
Subpart 4, Underwriting Property
Chapter 1, Appraisal Requirements, Appraisal Report Assessment
April 15, 2014"
"Layout and Floor Plans
Dwellings with unusual layouts and floor plans generally have limited market appeal. A review of the room list and floor plan for the dwelling unit may indicate an unusual layout, such as bedrooms on a level with no bath, or a kitchen on a different level from the dining room. If the appraiser indicates that such inadequacies will result in market resistance to the subject property, he or she must make appropriate adjustments to reflect this in the overall analysis.
However, if market acceptance can be demonstrated through the use of comparable sales with the same inadequacies, no adjustments are required.
Gross Living Area
The most common comparison for one-unit properties, including units in PUD, condo, or coop projects, is above-grade gross living area. The appraiser must be consistent when he or she calculates and reports the finished above-grade room count and the square feet of gross living area that is above-grade. The need for consistency also applies from report to report. For example, when using the same transaction as a comparable sale in multiple reports, the room count and gross living area should not change.
When calculating gross living area
• The appraiser should use the exterior building dimensions per floor to calculate the above grade gross living area of a property.
• For units in
condo or co-op projects, the appraiser should use
interior perimeter unit dimensions to calculate the gross living area.
• Garages and
basements, including those that are partially above-grade,
must not be included in the above-grade room count.
Only finished above-grade areas can be used in calculating and reporting of above-grade room count and square footage for the gross living area.
Fannie Mae considers a level to be
below grade if any portion of it is below-grade, regardless of the quality of its finish or the window area of any room.
Therefore, a walk-out basement with finished rooms would
not be included in the above-grade room count.
Rooms that are
not included in the above-grade room count may add substantially to the value of a property, particularly when the quality of the finish is high.
For that reason, the appraiser should report the basement or other partially below-grade areas
separately and make appropriate adjustments for them on the Basement & Finished Rooms Below-Grade line in the Sales Comparison Approach adjustment grid.
For consistency in the sales comparison analysis,
the appraiser should compare above-grade areas to above-grade areas and below-grade areas to below-grade areas."
(
oh crap - wait a minute...
.........hey "Joe" add this or we'll have every re agent and every loan officer and every banker breathing down our necks)
"The appraiser may need to deviate from this approach if the style of the subject property or any of the comparables does not lend itself to such comparisons.
For example, a property built into the side of a hill where the lower level is significantly out of ground, the interior finish is equal throughout the house, and the flow and function of the layout is accepted by the local market, may require the gross living area to include both levels.
However, in such instances, the appraiser must be consistent throughout the appraisal in his or her analysis and explain the reason for the deviation, clearly describing the comparisons that were made."
Printed copies may not be the most current version. For the most current version, go to the online version at
https://www.fanniemae.com/singlefamily/originating-underwriting.581
Typical Fannie-speak.......
do
NOT include
do
NOT include
do
NOT include
do
NOT include
do
NOT include
Lender:
"oh what the hell - g'head (especially if ya need to inflate the GLA to hit the Bullseye shhhhhh don't repeat that to anyone) just be sure you explain why you did it - and oh yeah - make damn sure your E&O insurance is active - and don't forget to make sure you type your Name and License number correctly. After all, should the chit hit the fan down the road and Fannie makes us "eat" the "inflated" loan - it's your chest the bullseye is painted on - not ours - YOU are the expert - we're merely a client"
:new_littleangel:.
