FNMA September revised FAQs

[Michigan CG]

Kindly post a recognized definition of Highest and Best Illegal Use. Thanks.

Kindly post a source where a legal structure without a permit is not the Highest and Best use in every part of the country, even places you can't google.

Kindly post where people were required to remove all basement finishes because they did not get a permit for that finished basement in a few small midwestern cities.

Kindly post where you can find any converted garage was required to be returned to a garage space in Milan, MI.

Kindly quit trying to paint the entire country with a broad brush of enforcement of legal building without permits.

 

[William K]

Kindly post a recognized definition of Highest and Best Illegal Use. Thanks.

Location: Hopland, CA
Mendocino County CA

“The Code Enforcement Division within the department receives violations from many sources, including r eferrals from other public agencies such as health, fire or police agen cies, confidential complaints submitted by members of the public or observations by Department personnel while conducti ng field inspections.

(1) a "Notice to Appear" citation may be issued which could impose fines by the Justice or Municipal courts,

(2) a "Notice of Violation and Lien" hearing may be conducted, at which time, a lien may be recorded against the property. The Notice of Violation would not be released until all fees and penalties have been paid and/or the violation abated; or

(3) the violation may be referred to the Mendocino County Counsel's office for filing of a civil action lawsuit seeking court orders and monetary judgments to compel compliance.

If you are in violation of a code section covered by the Infraction Citation Procedure, you will be is sued a "Notice to Appear" citation. You will be allowed 21 days to correct the violation without any penalties being assessed by the Courts. If the violation is corrected during this period and you obtain a "Certification of Correction" from the Code Enforcement Division and present proof of correction to the court, the citation may be dismissed.

If the violation is not corrected prior to your court appearance date, the courts will assess appropriate fines and penalties. Penalties for infractions are set by the court and may be up to $1,000 for each offense. Nonpayment of any penalty may cause a warrant to be issued for your arrest by the appropriate Justice or Municipal Courts.

Examples of code sections that are covered by the Infraction Citation procedure may include construction without a required building permit, failure to comply with a STOP WORK ORDER issued for un-permitted construction, occupancy of a structure prior to or without a Certificate of Occupancy, or establishing a use not permitted pursuant to County Zoning Codes.”

http://www.co.mendocino.ca.us/planning/pdf/Code_Enforce_FAQ.pdf

Don't try to make a "they don't care" argument with him. It gives him room to navigate and highlight things he copies and pastes. And he doesn't have a good grasp of HBU.

Not getting a permit does not equal an illegal use and that is where the primary concern is. Illegal uses. You can't get a permit for an illegal use... that should be obvious.

Read the local codes. There are uses that are referred to as "allowed uses" or in some jurisdictions "use by right" or even "allowed by right." These types of uses don't require a use permit because it is a use that is allowed. Then there are "permitted uses." These are uses that require a use permit. Then there are uses which require a "conditional use permit" and there might be several variations of those types of permits. These require special permits that the jurisdiction has to decided on a case by case basis.

And then we have "building permits." Almost all uses, anywhere, will require a building permit. That's a separate issue.

If a SFR is allowed in the "R1 - 6,000" district then you don't need a use permit to build an SFR. Just a building permit. The use is legal by right. If you add a family room that is also a "use by right" because it just makes the SFR bigger (assuming you follow the other requirements such as set backs, building codes, density limits, etc., etc.

Not getting a building permit does not make those uses illegal even though it violates the CIVIL code to build without getting the permit. The laws was broken by the person, not the property.

:new_microwave::new_popcornsmiley: :new_all_coholic:


OK I'm set, carry on!


Can you tell us again about highest and best use and legal nonconforming and Illegal non-conforming properties again........ I'm not sure I got it quite yet. Do you have to check building permits for H&BU analysis?

 

[CANative]

What are you trying to say William?

 

[William K]

What are you trying to say William?

I'm just trying to understand this issue........ I'm surprised it has never come up before?

This should be a separate thread.

Maybe someone can start one. (or fifty)

Not to change the subject, but where does Fannie say I can't wear flip flops and shorts on my appraisals?

Does USPAP allow................. (fill in blank here)

I just got My first FHA assignment, how do I do an FHA appraisal? is there anything on line? can someone send some verbiage? is it different from a Conventional?

Can you believe what the AI has done!


Where's an Emoji beating a dead horse when you need one?

 

[CANative]

Oh, okay. Thanks for clarifying.

 

[VolcanoLvr]

OK, chillin', back to the primary post subject. Here's more, although somewhere on the first page another poster mentioned Q16 & 17...

Q16. What type of properties are to be analyzed for the data reported in the One-Unit Housing Trends portion of the Neighborhood section of the appraisal report form?
The data regarding trends to be reported in the One-Unit Housing Trends sectionmust be reflective of those properties deemed to be competitiveto the property being appraised. Additional commentary should be provided on the other segment(s) of the neighborhood when segmentation is present to aid in understanding the overall neighborhood dynamics.

Q17. Are the trends that are reported on the Market Conditions Addendum to the Appraisal Report (Form 1004MC) the same trends that are to be reported in the One-Unit Housing Trends section of the appraisal report (Form 1004)?
Yes. The conclusions regarding trends that are obtained from the Form 1004MC must be the same trends reported in the Neighborhood trends section of the Form 1004. The information reported on both forms must be consistent to provide the lender with a clear and accurate understanding of the market trends and conditions present in the subject neighborhood, based on properties that are considered competitive with the subject being appraised.

An issue with the ‘classic’ methodology is the “predominate” value of an overall neighborhood with dissimilar properties can be much different than when only comparable (competitive) properties are used in the trend analysis. So, when appraisers use the proper properties as outlined above, there should be no significant problems with that data point, because the “predominate” value will more than likely fall within the price range of the comparable (competitive) properties.

>>>>> Here’s another clarification to accepted policy that drives appraisers nuts:

Q20. If a property constitutes a legal, non-conforming use of the land and is a one- to four-unit property or a unit in a PUD, must a lender obtain documentation that indicates the improvements can be rebuilt to current density in the event of partial or full destruction?
No.The requirement for the copy of the zoning regulations or a letter from the local zoning authority that authorizes reconstruction to current density only applies when the property being appraised is a condo unit or a co-op share loan located in a project.

Link to the document: [url]https://www.fanniemae.com/content/FAQ/appraisal-property-report-faqs.pdf[/URL]

 

[DJBanas]

OK, chillin', back to the primary post subject. Here's more, although somewhere on the first page another poster mentioned Q16 & 17...

Q16. What type of properties are to be analyzed for the data reported in the One-Unit Housing Trends portion of the Neighborhood section of the appraisal report form?
The data regarding trends to be reported in the One-Unit Housing Trends sectionmust be reflective of those properties deemed to be competitiveto the property being appraised. Additional commentary should be provided on the other segment(s) of the neighborhood when segmentation is present to aid in understanding the overall neighborhood dynamics.

Q17. Are the trends that are reported on the Market Conditions Addendum to the Appraisal Report (Form 1004MC) the same trends that are to be reported in the One-Unit Housing Trends section of the appraisal report (Form 1004)?
Yes. The conclusions regarding trends that are obtained from the Form 1004MC must be the same trends reported in the Neighborhood trends section of the Form 1004. The information reported on both forms must be consistent to provide the lender with a clear and accurate understanding of the market trends and conditions present in the subject neighborhood, based on properties that are considered competitive with the subject being appraised.

An issue with the ‘classic’ methodology is the “predominate” value of an overall neighborhood with dissimilar properties can be much different than when only comparable (competitive) properties are used in the trend analysis. So, when appraisers use the proper properties as outlined above, there should be no significant problems with that data point, because the “predominate” value will more than likely fall within the price range of the comparable (competitive) properties.


Link to the document: [url]https://www.fanniemae.com/content/FAQ/appraisal-property-report-faqs.pdf[/URL]

THe issue of "predominant" price and age has not been addressed in this publication. The FAQ specifically states "One-Unit Housing Trends." The "One-Unit Housing" where price and age is included is a different box.

 

[444nutman]

I am glad they addressed the 12 month comp rule.
I had an UW tell me to remove a comp that was over 12 months old because it violated Fannie Mae guidelines. I told him when he tells me the exact page, of Fannie Mae guidelines that says that, then I will remove the comp and until then it stays in the report.
A month later still have not heard back from him.

 

[RSW]

This is one of the better Q&A publications I've seen.

A number of good things cleared up, including the 10%/15%/25% adjustment nonsense, the "using comps over 12-months" argument, etc.

Unfortunately, they somewhat sidestepped the question regarding non-permitted additions included as GLA (they didn't provide a direct answer). But certainly, they said non-permitted additions need to be analyzed and their affect on value needs to be considered (where are you, Mike K? :laugh.

The Q&A, in no uncertain terms, instructs that the 1004MC data match the neighborhood sales range data on page 1; something Rich Heyn (and Danny Wiley) have said from the get-go, something I resisted with all I could muster :laugh:, and something that was addressed in the last selling guide update; clearly and persuasively readdressed now.

More good stuff and not a lot of bad stuff (IMO).

Thanks, Peter!

That's funny because the FHA wants page 1 to reflect the entire neighborhood.

 

[huntercharlie]

THe issue of "predominant" price and age has not been addressed in this publication. The FAQ specifically states "One-Unit Housing Trends." The "One-Unit Housing" where price and age is included is a different box.

Ditto. They only seem to be addressing the trends section.