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Manufactured Housing Underwritting Rules

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charlie hill

Sophomore Member
Joined
May 4, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
You guys gave me such good answers on my first question I thought I'd try another. I got an assignment to do a URAR on a house. I was suspicious about the address so I drove by it before accepting the assignment. It is a manufactured home (double wide) with vinyl skirting under it. Complete with one piece ripped out and the lawn mower stuffed in the hole. I have not done manufactured housing for quite a while but I don't think this qualifies as real property as it is sitting. Is there a way to appraise this property and comply with USPAP and the Fannnie Mae guidelines?
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Is it taxed by the county including the manufactured home? If so, it's part of the Real Estate. If not, call the lender and let them know.

I'm moving this to the Manufactured Housing section of the forum. Check some of the threads there. I believe there are a couple good ones regarding this issue.
 

charlie hill

Sophomore Member
Joined
May 4, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
The county only shows the lot in it's real estate listings. I told the client this and sent them a picture of the property. They agreed with me that the manufactured home does not appear to qualify as real property but the contact told me here supperiors say I can still do the report. However, she was not able to tell me how.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Yes, you can do the appraisal subject to several conditions for the home. Good idea to discuss the situation with the lender first before you get too involved. First find out if the home is currently being taxed as real property, if not find out what procedures are needed for it to be changed in your area (talk to your lender about that, as well as do the appraisal subject to those procedures). Next, find out from local governing authorities what requirements and procedures they have for foundations, is there an inspection report you could get a copy of for example. If there isn't one readily available, another subject to would be to have the installation and foundation be approved by the local governing agency (if FHA, it will need to be inspected by a licensed engineer). Then if the order is a go ahead, ask questions and look for things while at the home. Ask if the wheels and axles have been removed, stick your head into the crawl space (actually your camera from several angles) to see what you can see. Take photos of the HUD label on the exterior, also any insignias your local government applies, also take a photo of the data plate (map of the USA) inside, write down in your notes all the information that you can find. Then depending on what you see, call the lender again with that information. If the axles, wheels and tongue are still there, the lender might either cancel the order right there and then or will require the borrower to remove them before the loan can close. Even if all the paperwork and inspections by the local government for the foundation is in order, if you don't like the looks of it, make your appraisal subject to an inspection by a licensed engineer. If the people want to finance their property, they might have to do some renovation or retrofitting to meet lending requirements. That is why you keep the client informed as you find out the information.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
You could do it subject to the manufactured home being approved by the county and added to the real property records.

That is also a Hypothetical Condition appraisal and report.
 

charlie hill

Sophomore Member
Joined
May 4, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
Thanks Jo Ann,

I agree with all that you have said. The problem is the lender (appraisal management company) wants me to appraise it as is as. I have not accepted the assignment yet so I can not go on the property and look in and under it. I do know that the way it is set up does not meet the requirements for real property as I understand them. I can see that from the road!

I agree that I could appraise it contingent on the unit being attached to the earth as required to make it permanent in a legal sense. I just wanted to confirm my belief that it MUST be real property and not personal property sitting on real property for me to appraise it.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
I've got an order from an AMC that is going to cause ripples. Two weeks ago I looked at a property, still had tongue, wheels, axles and was a 1972 model. Called the AMC soon as I got back to the office, took several days but they canceled the order. Two weeks ago, a similar situation but a 1985 model, so called, they put it on hold and then left a message on my voice mail Friday to finish the report because "the assessor's says it is affixed". What they don't realize is that only means the unit is being taxed as real property, has absolutely nothing what so ever to do with the physical setup. It actually is a very nice set up, slump block perimeter enclosure, two full length covered wood decks and carport with half of one screened in, detached storage building--everything very neat, tidy, good appearance, etc, etc. But the slump block enclosure very carefully goes around the tongues and the wheels/axles are still underneath. The entire property would have to be torn apart to get the wheels/axles removed, slump block enclosure ripped out in front to get the tongues removed. Really sad situation in away, lovely set up, as permanent as a site built house, mature landscaping including trees surround the unit (they would have to be cut down to make any changes), etc--but it will not qualify for typical financing because of the tongue, wheels and axles remaining. And to make it even sadder, it belongs to an 85 year old widow who had to move in with her children because she can't live alone and she needs some money, the property is free and clear.

So since the AMC said to go ahead, go ahead and finish the appraisal, explaining everything that is existing and lacking, use the Hypothetical Condition that Pamela mentioned--maybe even repeat it several times in several locations in the report. The lender will then have to figure out what to do next.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
I don't know what state you're in but I'll give you my two cents. In Texas, there's a web site for manufactured homes that you can search by name, or if you have the HUD tag or SN, search for that. It will tell you if the title has been surrendered for real estate. 99% of homes set on land is real estate as they can't get the original package loan. (Homes in MH projects are still personalty even with wheels removed). If this is on a tract of land, even in a subdivision of mfg homes, the probability is that it is realty.

That being said, go do it and make it contingent on the title being surrendered to the state for conversion to real estate. Note- the assessment of the county is generally irrelevant. The fact that they can't find it is not unusual.

As to how it is attached, is it typical for the area, meets state and local requirements. FHA requirements are not applicable unless you are going to do an FHA loan.

Have fun. :D
 

charlie hill

Sophomore Member
Joined
May 4, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
Good advice I guess Jo Ann but I think I would just as soon avoid the problem up front as compared to doing the report and going throught the hassle of having to prove I am right and then trying to get paid. By the way, being a construction worker in a former life I could fix the problem with the older ladies property.

All she needs to do is have a welder go under her house and carefully cut the axle and tongue up into pieces that can either be left unusable on the ground or taken out in small pieces. The regs don't say the tongue and axles can't be on the property. They say they can not be attached and useable. I say carefully because there is considerable fire hazzard in what I propose. If the risk is too great there are ways to mechanically cut it up as well. A saw called a portaband would make short work of the tongue and axles and come to think of it is a better solution.

Thanks for your thoughts on my situation. I don't know if the axles are under the unit I am dealing with or not. I know the tongues are not there but there is not even a bush around it and a good man could break it down, weld the tongues back on and move it off the lot before lunch. It would be my luck that if I signed the report on the 10th at 3pm the unit would be gone by dark!
 
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