Help/Suggestion-Joplin Mo.

[Chaplain60]

Hello, first let me apologize for maybe not posting this is the right place.
I have a 4 unit apartment(115 year old) building zoned C-3, however the City is 100% ok with it used entirely as residential. That I am in process with a refi.
The lender wants a 1025 appraisal. The first appraiser AMC engaged would not do it due to zoning, upon providing documentation from city that we are in compliance and good with zoning there was still a declination due to difficulties of comps or whatever.
I hate to lose this refi. I have tried contacting local appraisers and have hit a brickwall due to most local appraisers saying they are residential and I need a commercial appraiser. Any leads or suggestions would be greatly appreciated. Thank You

 

[Zoe]

Hello, first let me apologize for maybe not posting this is the right place.
I have a 4 unit apartment(115 year old) building zoned C-3, however the City is 100% ok with it used entirely as residential. That I am in process with a refi.
The lender wants a 1025 appraisal. The first appraiser AMC engaged would not do it due to zoning, upon providing documentation from city that we are in compliance and good with zoning there was still a declination due to difficulties of comps or whatever.
I hate to lose this refi. I have tried contacting local appraisers and have hit a brickwall due to most local appraisers saying they are residential and I need a commercial appraiser. Any leads or suggestions would be greatly appreciated. Thank You

Keep reaching out to commercial appraisers. There has to be a commercial appraiser near you. Keep trying. Ask AMC if they can use them?

How many commercial appraisers have you contacted? Have you asked your AMC if they know any?

BTW, who is your AMC?

 

[Surf Cat]

115 years ago when that four unit was built, it was most likely a residential area. Now, it's primarily commercial zoning. Zoning changes happen all the time, what you have is a legal non-conforming use.

Your problem is while a Certified Residential Appraiser can typically appraise properties with up to 4 units (non-complex), the key factor is not just the current use or zoning, but the highest and best use of the property as defined by USPAP.

If a property is zoned for commercial use or allows for five or more units, the appraiser must perform a commercial-level analysis to determine whether redevelopment to a multi-family or commercial use is the H&BU. Which, would put this in the complex assignment realm.

While you would hate to lose the assignment, you may have to let this one go, unless you can find a commercial licensed appraiser to guide you through the process. Plus, if this is from an AMC, I highly doubt that the fee is consummate of the work involved to pull this off.

 

[Zoe]

115 years ago when that four unit was built, it was most likely a residential area. Now, it's primarily commercial zoning. Zoning changes happen all the time, what you have is a legal non-conforming use.

Your problem is while a Certified Residential Appraiser can typically appraise properties with up to 4 units (non-complex), the key factor is not just the current use or zoning, but the highest and best use of the property as defined by USPAP.

If a property is zoned for commercial use or allows for five or more units, the appraiser must perform a commercial-level analysis to determine whether redevelopment to a multi-family or commercial use is the H&BU. Which, would put this in the complex assignment realm.

While you would hate to lose the assignment, you may have to let this one go, unless you can find a commercial licensed appraiser to guide you through the process. Plus, if this is from an AMC, I highly doubt that the fee is consummate of the work involved to pull this off.

Yeah, they need to be aware that MV definition requires H&B use analysis. Only value definition that requires H&B use analysis.

 

[Zoe]

115 years ago when that four unit was built, it was most likely a residential area. Now, it's primarily commercial zoning. Zoning changes happen all the time, what you have is a legal non-conforming use.

Your problem is while a Certified Residential Appraiser can typically appraise properties with up to 4 units (non-complex), the key factor is not just the current use or zoning, but the highest and best use of the property as defined by USPAP.

If a property is zoned for commercial use or allows for five or more units, the appraiser must perform a commercial-level analysis to determine whether redevelopment to a multi-family or commercial use is the H&BU. Which, would put this in the complex assignment realm.

While you would hate to lose the assignment, you may have to let this one go, unless you can find a commercial licensed appraiser to guide you through the process. Plus, if this is from an AMC, I highly doubt that the fee is consummate of the work involved to pull this off.

Hold on. I am not sure this is not the owner. Hint: "general public"

 

[Terrel L. Shields]

The lender wants a 1025 appraisal.

Sounds like Arvest but regardless of who, are you actually going to convert it to SFR?

Any leads or suggestions would be greatly appreciated.

CRs can appraise up to 4 units. 5 units require CG. They just don't want to deal with it, and I don't blame them. Sounds like a PITA.

Secondly, again are you trying to convert it but finance it secondary market "as is"? As is, it is a 4 plex. As proposed, then you need a plan, cost estimates for the conversion and perhaps a zoning compliance. Or, are you trying to refi as a SFR but have no intention of modifying the property or asking for rezoning? That's not kosher.

Go for financing outside of secondary market and any community bank can probably get it appraised.

 

[Zoe]

Sounds like Arvest but regardless of who, are you actually going to convert it to SFR?

CRs can appraise up to 4 units. 5 units require CG. They just don't want to deal with it, and I don't blame them. Sounds like a PITA.

Secondly, again are you trying to convert it but finance it secondary market "as is"? As is, it is a 4 plex. As proposed, then you need a plan, cost estimates for the conversion and perhaps a zoning compliance. Or, are you trying to refi as a SFR but have no intention of modifying the property or asking for rezoning? That's not kosher.

Go for financing outside of secondary market and any community bank can probably get it appraised.

Yeah something is being hidden.

 

[djd09]

Fannie Mae only purchases or securitizes loans on properties if the improvements constitute a legal conforming use of the land. However, Fannie Mae will purchase or securitize a loan for a property that constitutes a legal, nonconforming use of the land provided that the appraisal analysis reflects any adverse effect that the nonconforming use has on the value and the marketability of the property. This requirement applies to all property types.

Fannie Mae will not purchase or securitize a loan secured by a property that is subject to certain land-use regulations, such as coastal tideland or wetland laws, that create setback lines or other provisions that prevent the reconstruction or maintenance of the property improvements if they are damaged or destroyed. The intent of these types of land-use regulations is to remove existing land uses and to stop land development, including the maintenance or construction of seawalls, within specific setback lines.

Site Section of the Appraisal Report | Fannie Mae

This topic contains information on reviewing the Site section of the appraisal report form, including:

selling-guide.fanniemae.com

 

[J Grant]

If you are using a lender, typically, they want to hire their own choice of appraiser and might not use the appraiser's report that you selected. Residential appraisres are licenses to appraise up to four units in an income producing property.

 

[Surf Cat]

The lender wants a 1025 appraisal. The first appraiser AMC engaged would not do it due to zoning, upon providing documentation from city that we are in compliance and good with zoning there was still a declination due to difficulties of comps or whatever.

Wow.....reading is fundamental. My mistake on Post Number 3, I thought you were the appraiser assigned with the job.

My post however, is relevant on why residential appraisers are not taking your assignment. Your problem however, and the baine of existence for appraisers, is my bold above....."AMC engaged". They either don't have a commercial licensed appraiser on the roster or they're trying to shove this at a residential appraiser not understanding the parameters to make their money.

it also appears that the lender doesn't understand that your fourplex is in a commercial zone. They see a 2 to 4 for a 1025 and just shove it at the AMC they've been using for years.

Contact the lender and let them know of the problems you're coming up against. Maybe they have a commercial appraiser outside of the AMC they use.