Help With VA Appraisal (in Law Apartments - Railings, Paint Etc

[Mena22]

Good morning! I hope you don't mind me asking a few questions! (I had to pay $25 to post here for some reason as it was not working for me with the ad-blocker)

A little background: I've been in the Air Force Reserves for 15 years and currently still serving. I finally found my dream home and will be using my VA home loan benefit for the first time. We are currently in contract for a house and our inspection is tomorrow. A few things:

-The house is for sale by owner. The owner has advertised the home as a three bedroom 2.5 bathroom with two in-law apartments in the finished basement with their own entrance. Utilities are not separate. The owner showed us the home with the two kitchen stoves in each "in law apartment." Owner said that the apartments are "legal" and so we thought (reasonable to assume) that meant that the stoves were also legal. Great! This is our dream of having my mother in law live with us and have my daughter grow up with her (crazy I am I know.) Fast forward to when we receive the actual property disclosure which included the occupancy report. Apparently the house is legally zoned as a one family occupancy and is listed on record as five bedrooms, 4.5 bathrooms. No mention of accessory dwellings or legal in-law apartments. So basically the stoves are illegal. The "apartments" I'm guessing are legal as they were included in the original blueprints that were approved by the town board. The "kitchen(s)" were included in the original blueprints that were approved but I guess not the stoves. Is this correct?

Also, this may be regional but how in the world can you have a legal in law apartment including a kitchen but the stoves are illegal? I do not understand this at all! We live in Upstate, NY if that matters.

Questions about this:
- So when the VA appraiser comes to look at the house is he going to base his comps on what the house is currently on record for in the town? ex. five bedrooms, 4.5 baths? Even though it appears (the way it is set up and built) to be the main house having 3 bedrooms, 2.5 baths then in the basement there are two "bedrooms" but they are separated with walls to look like apartments, each with doors leading into a hallway and then the second entrance. Or would he look at the house how it is set up and look at comps with three bedrooms 2.5 baths and two accessory dwellings? If this is the case I think we are screwed as I don't believe there will be ANY comps for this in the surrounding area since it's so unique. If the assessor goes by what it is listed as per the town (5 bedrooms, 4.5 baths) I think we will be in good shape getting appraised for what we need for the loan (similar homes with the same square footage have gone for significantly more than what we are buying the house for.)

-The stoves are going to be removed for the inspection and appraisal. *Don't worry we are not going to put them back in until they are legal. We are currently researching town laws and how to apply for a permit to either make one "apartment" a legal accessory unit (as I believe you are only allowed one) to include a legal stove or just get a permit to put in the stove but I'm not sure which specific documentation/applications we need and what we need to apply for (an actual building permit to turn into accessory dwelling or just application to put in the kitchen stove legally). My husband is calling the town to inquire about this. Does anyone know how likely it is for the town to approve adding a stove to a "legal apartment?" It would be for my mother in law to live with us and have her own space and private kitchen. The stove is an actual kitchen stove and it is electric.

- When the appraiser comes is he going to be like "yeah you just took out the stoves I know what you are doing" type thing? Is this house going to "fail" the appraisal because it physically looks like there are two apartments in the basement? Technically they are the 4th and 5th bedrooms per the occupancy report but they also have kitchen counters/cabinets, sink, and refrigerator full bathroom and living area. Or is he going to base it on the 5 bedroom?

If you made it this far thank you! I also have another question regarding railings and lead paint.

- The house was built prior to 1979 (1976 I believe) and from what I read if there is any peeling, cracking, or chipped paint it is automatically assumed that the house has lead paint. When we went to the house (twice now) we did not see any evidence of this at all. Is it safe to assume that the paint will be ok? Does it depend on the specific assessor? I also believe it was re-painted fairly recently maybe in 2015. It looks brand new.

-Railings: The house is on a hill and the main entrance is on top of the hill and the apartment entrance is on the bottom of the hill. There are wood "flower box" like steps that have gravel in them leading from the apartment entrance up to the main driveway on the top of the hill. I found on-line similar pictures as I don't have one of the specific steps. I will take one tomorrow at the inspection if needed. They kind of look like this:

WOW sorry so big! I don't know how to post a picture any other way! I don't think our steps are as high though. But do these need railings? They are lower to the ground vs. how these steps are. I will get a picture tomorrow at our inspection.

Also railings: Under the front door there are two steps. Am I correct in saying they do not need railings as they are not more than three steps?

Another railing in the house: Currently there are stairs leading from the kitchen/dining room down to the basement. On the right side there is like a banister/wall type thing with cut out windows or something as like a fancy railing? I'm not sure if this would be considered a railing as it is more like a wooded partition/banister type thing going down the whole length of the stairs. Would the opposite wall also need a specific railing? Everything I've read says that only one railing is required. Does this also depend on the appraiser? I will take a picture of this as well tomorrow. It looks like this sort of:

(second picture if you click the broken pic here) and no railing on the opposite wall. Does this wooded partition/banister sufficient or does it need another railing?

Ok I think that is long enough for now. Thank you so much for reading and any advice, information, experience would be greatly appreciated. Once we found out about how the stoves were not legal I was crushed as we almost walked away. Did not like how the owner mislead us there. However, my husband thinks it may be alright with getting the permit for the one stove and we are proceeding with the house. I am just so nervous for the appraisal as this is my dream home and feel it is meant to be. We have been looking for four years and finally found something. Thanks so much everyone and sorry this was so long and my picture was huge.

Sorry so long!

 

[Mena22]

welp didn't work. Here is the link. It's obviously not the same but you get the idea.

https://st.hzcdn.com/fimgs/f21107b90fd00c83_1342-w500-h666-b0-p0--mediterranean-staircase.jpg

 

[GA Benny]

Things may be different in New York, but I have never heard of a stove being "illegal" or even a basement accessory unit being "illegal". Maybe we are fortunate here in GA not to have that problem.

As for your other questions, the property may still contain lead based paint, and likely there will be some level of disclosure. However, the appraiser will not require repairs unless there is evidence of chipping/peeling paint. The stairs are not quite as simple to answer. There is no specific guideline in the handbook that requires handrails, but the appraiser must use professional judgment to determine if a lack of rails impacts the health and safety of the occupants. This will depend on several factors such as the height of the staircase, number of risers, the grade of the land, the age and mobility of the occupants, etc.

 

[GA Benny]

I should also add....Thank you for your service to our country!

 

[Mena22]

Things may be different in New York, but I have never heard of a stove being "illegal" or even a basement accessory unit being "illegal". Maybe we are fortunate here in GA not to have that problem.

As for your other questions, the property may still contain lead based paint, and likely there will be some level of disclosure. However, the appraiser will not require repairs unless there is evidence of chipping/peeling paint. The stairs are not quite as simple to answer. There is no specific guideline in the handbook that requires handrails, but the appraiser must use professional judgment to determine if a lack of rails impacts the health and safety of the occupants. This will depend on several factors such as the height of the staircase, number of risers, the grade of the land, the age and mobility of the occupants, etc.

Thank you so much for your reply! I figured I would ask here as I did not see anything specific about railings in the MPR's. So basically it's up to the individual apraisor? Thanks again!

 

[Mena22]

I should also add....Thank you for your service to our country!

Oh no problem! You are welcome! 5 more years to go! lol!

 

[Mena22]

Anyone from NY who has experience with in-law apartments/accessory dwellings and "illegal stoves"? Thanks!

 

[Mena22]

Things may be different in New York, but I have never heard of a stove being "illegal" or even a basement accessory unit being "illegal". Maybe we are fortunate here in GA not to have that problem.

As for your other questions, the property may still contain lead based paint, and likely there will be some level of disclosure. However, the appraiser will not require repairs unless there is evidence of chipping/peeling paint. The stairs are not quite as simple to answer. There is no specific guideline in the handbook that requires handrails, but the appraiser must use professional judgment to determine if a lack of rails impacts the health and safety of the occupants. This will depend on several factors such as the height of the staircase, number of risers, the grade of the land, the age and mobility of the occupants, etc.

Would you know if the appraiser would look at comps for the 5 bedroom 4.5 baths as that is what it is zoned for and that is what the occupancy report says. Or would he look at comps for how it is actually presenting as physically as it looks like the main house is three bedrooms 2.5 bath then two in law apartments? Thanks so much!

 

[GA Benny]

Would you know if the appraiser would look at comps for the 5 bedroom 4.5 baths as that is what it is zoned for and that is what the occupancy report says. Or would he look at comps for how it is actually presenting as physically as it looks like the main house is three bedrooms 2.5 bath then two in law apartments? Thanks so much!

It is an interesting situation, and it would be difficult to say exactly how the appraiser will approach this. The single family appraisal form (FNMA 1004) only allows for 1 additional accessory unit. Prior guidance from the VA, if the property has more than 1 accessory unit, the appraisal should be completed on the small income residential form (FNMA 1025) which allows 2-4 units. That particular form calculates total building area, not just above grade living area, so the area will include both levels of your home. But the area will be itemized and the area/bedrooms will be analyzed on a per unit basis, not in the aggregate. Having said that, ideal comps would still be the same regardless of the format or which appraisal form is used. Ideally the comp selection would be similar homes with accessory units attached or in the basement. Of course this will be dependent on what is available in the market.

 

[GA Benny]

On the other hand, if the units cannot be classified as "accessory units" then you just have a single family home with a finished basement. Much easier for the appraiser that way, but income potential will not be considered in the valuation.