Harris County Housing & Community Development

[Mark Sargent]

I have been asked to appraise a couple of new construction townhomes and detached one unit in these communities. I have researched and there is a 10 year restriction on resale and penalties for early sale or default.

I did some of these but it has been over 15 years ago and I cant remember if there is something special needed ( my brain is telling me there is a specific manner to appraise but i cant recall it) or if I just appraise as a typical standard assignment and what commentary i need to included. Does anyone have experience that they could assist me with completing this assignment.

 

[OSU Beavers]

Houston, Texas?

 

[Mark Sargent]

Houston, Texas?

Yes

 

[OSU Beavers]

Appraisal Requirements

• 
  
• • Program Guidelines: Must adhere to specific federal/local funding rules.
  • Value Thresholds: Sales prices often cannot exceed the appraised value by more than set percentages (e.g., 15%) without heavy justification.
  • Highest & Best Use: Must account for affordable housing restrictions or Low-Income Housing Tax Credit (LIHTC) influences if applicable.
  • Special Commentary: Required to explain program-driven value impacts, grant constraints, or intended agency use.

 

[Tom D]

Just explain why it is being sold below market price. The after settlemvent rules are irrelevant. Just like predicting the future. The value is today, not the possibility of what if happens. Not my problem.
The big issue was finding similar give away values. These houses were typically built with builder grade quality. If you weren't scared living in that neighborhood, it is a very good bargain.

 

[John Hassler]

What you are describing is a property with a list of voluntary restrictions to aide what are usually some low income group. The agreements tend to be one-offs so there are no hard and fast rules. Typically, there is some sort of first right of refusal retained by the seller based on the lesser of a mathematical formula, like SP plus a local COLA, or market value. Based on your post, it appears there is a sale restriction for market value if sold before ten years.

The key to appraising these is thoroughly reading the voluntary agreement and understanding the specific bundle of rights you are valuing.

Great assignment, enjoy!

 

[lostinthezone]

If this is going Fannie Mae or Freddie Mac, there's specific instructions in their Selling Guides for how to appraise it and what to include.

Fannie Mae's guidance can be found in this section: B5-5.2-02, Loans with Resale Restrictions: Eligibility, Collateral and Delivery Requirements (08/05/2026)

Freddie Mac' guidance can be found in this section: 4406.4: Appraisal requirements for Mortgages secured by properties subject to resale restrictions (02/04/26)

The program here in my area has changed substantially over the years with various modifications. They originally started out with just a ten year restriction and then giving the owner the ability to sell at market, to modifying it to requiring the property owner to resell it back to the community development org at the original below market price plus appreciation based on the CPI. They thought people were just making way too much money on the original 10 year plan.

 

[Mark Sargent]

Ok thanks Guys. I couldn't find the Fannie guidelines was using wrong key words....

 

[OSU Beavers]

How is business in the greater Houston area? We are thinking of moving to Magnolia, Texas, but I am unsure about the appraisal volume. At least there are always tax appeals.

 

[Mark Sargent]

Sporadic. Was slammed the last two weeks now just a couple but maybe that's because school started again. magnolia is hot right now lots of new construction