Mixed use FNMA

[Deleted member 142783]

Guidelines for a mixed use seem clear, except the following:

• report the market value of the property based on the residential characteristics, rather than of the business use or any special business-use modifications that were made.

Mixed-Use Property Appraisal Requirements | Fannie Mae

This topic contains information on special appraisal considerations for mixed-use properties, including:

selling-guide.fanniemae.com

I have a 20 acre lot with 12 acres of producing vines. Would the FNMA guidelines call for a hypothetical the vines are not being valued?

 

[Terrel L. Shields]

I have a 20 acre lot with 12 acres of producing vines

You would not add the value of the grapes (I am assuming) nor any business enterprise value. Let me make it easier. Say someone has a beauty shop in their house. The beauty equipment and chair(s) would not be added to the value, nor the income from the business capitalized.

Value the land as if vacant and available for its highest and best use and use comps with large sites and estimate the value of those lots and make a dollar for dollar adjustment.

 

[Tom D]

12 acres of grapes. did they have a press in the basement to make their own vino. did you ask them what they do with the grapes. nice hobby when you retire.

 

[Mark K]

Is there a residence on the site? You mention only the 20 ac. lot.

 

[J Grant]

Guidelines for a mixed use seem clear, except the following:

• report the market value of the property based on the residential characteristics, rather than of the business use or any special business-use modifications that were made.

Mixed-Use Property Appraisal Requirements | Fannie Mae

This topic contains information on special appraisal considerations for mixed-use properties, including:

selling-guide.fanniemae.com

I have a 20 acre lot with 12 acres of producing vines. Would the FNMA guidelines call for a hypothetical the vines are not being valued?

There is no HC.

You are not valuing any income from the grapes per an assignment condition. Disclose that.

 

[Deleted member 142783]

Sorry, proposed construction.

 

[Deleted member 142783]

There is no HC.

You are not valuing any income from the grapes per an assignment condition. Disclose that.

I thought this was a scope of work issue. Difference between assignment condition and scope of work = assignment conditions do not impact assignment results.... Am I off base here?

 

[Mark K]

Sorry, proposed construction.

In this area, it would be corn or beans on the acreage and no, there would be no contributory value included for the crops even though the 12 acres would bring in about $3,600/year in income.

I realize that the permanent grapevines would add value for some buyers but in your case and for a F/F loan, I would not include value for them. Hopefully you can find a comp that had existing vines in place.

I tend to disagree w/Terrel re; beauty shop equipment. Those items are easily moved, vines not so much. Yours is more akin to having an orchard full of apple trees. Its likely that a buyer would want the trees or vines for income but F/F probably wouldn't allow it. A local bank would probably have guidelines that would allow for the potential income.

Another case of F/F and their desire to ignore reality in their zeal to make a square peg fit into a round hole to facilitate lending.

 

[J Grant]

I thought this was a scope of work issue. Difference between assignment condition and scope of work = assignment conditions do not impact assignment results.... Am I off base here?

Yes, an assignment condition affects the scope of work, but it still did not create an HC.

This may not even be a mixed-use property ( which is mixed commercial and residential). It sounds more like a hobby farm - a house on 20 acres with 12 acres planted as a vineyard. Some misc minor income from IMO does not make a property "commercial."

 

[Dublin ohio]

Yes, an assignment condition affects the scope of work, but it still did not create an HC. The assignment income is

This may not even be a mixed-use property ( which is mixed commercial and residential). It sounds more like a hobby farm - a house on 20 acres with 12 acres planted as a vineyard. Some misc minor income from IMO does not make a property "commercial."

An acre of grapes can generate up to $15K a year x 12 acres=$180K. Not exactly "misc minor income".