Multiple Condition Ratings On Multi Unit

[Chase UW]

I am an UW and have a question on Small Residential Income properties. I am reviewing a 2 unit and the condition rating is C2,C3. The appraiser is stating that one unit had recent renovations and is C2 and the other unit is a C3 due to no renovations. Shouldn't the report have only one condition rating applied?

I have never seen multiple condition ratings before on a report. Is this an acceptable practice?

 

[J Grant]

The appraiser did it wrong imo...if the units are considered as a whole (one property,O the fact that virtually all of it is not C2 means it is not C 2. It is C3 with partial remodeling (explain)

 

[Terrel L. Shields]

I have never seen multiple condition ratings before on a report. Is this an acceptable practice?

Depends. For Fannie, probably not, but it likely is a correct assessment so....how did it get pass the computer? Is UAD compliance required of small income properties forms?

 

[residentialguy]

The small income report can have what ever the appraiser feels like. It's not a UAD report, so it doesn't matter. Personally I'd never use UAD terms on a non UAD form, as it is confuses the reader (case in point here) and the terms are not well defined.


UAD Forms 

• Uniform Residential Appraisal Report (Fannie Mae Form 1004/Freddie Mac Form 70) 
• Individual Condominium Unit Appraisal Report (Fannie Mae Form 1073/Freddie Mac Form 465) 
• Exterior-Only Inspection Individual Condominium Unit Appraisal Report (Fannie Mae Form 1075/Freddie Mac Form 466) 
• Exterior-Only Inspection Residential Appraisal Report (Fannie Mae/Freddie Mac Form 2055)

Non-UAD Forms (Forms not required to include the UAD standardization and/or mapping) 

• Manufactured Home Appraisal Report (Fannie Mae Form 1004C/Freddie Mac Form 70B) 
• Small Residential Income Property Appraisal Report (Fannie Mae Form 1025/Freddie Mac Form 72) 
• Individual Cooperative Interest Appraisal Report (Fannie Mae Form 2090) 
• Exterior-Only Inspection Individual Cooperative Interest Appraisal Report (Fannie Mae Form 2095)

 

[Dublin ohio]

I find it hard to understand how the appraiser considered one unit a C2 and the other C3. How do you completely renovate 1/2 of a building. I could see a complete interior renovation of one unit. But what about building exterior. Did they adjust in grid for condition based on unit comparison. Hard to imagine sales data that would provide basis for per unit comparison when it comes to condition. Income analysis would probably be the only way to determine any kind of reaction. I agree with J Grant. Should have been considered C3 with explanation. I agree with res on not using UAD terms for non UAD reports. I have a few clients that require it. But they pay extra for it.

 

[Deleted member 134708]

+1 @residentialguy

 

[Terrel L. Shields]

I find it hard to understand how the appraiser considered one unit a C2 and the other C3.

Interior counts. I've seen trashed out apartments being stripped down while other units were occupied and in good condition. I appraised just such a four plex back in the bust and there isn't any way you could claim it was all one or the other. And again since UAD does not apply to the property, these code words are just that, code words, like Fair, Average, good... and in this case it is quite apparent the appraiser says one is CONDITION 2 and the other is CONDITION 3...I see no problem with that but in a UAD required report, it would not fly. Either way does not change the gist of the problem. One unit is in better shape than the other. The Q rating OTOH should be the same.

 

[Dublin ohio]

Interior counts. I've seen trashed out apartments being stripped down while other units were occupied and in good condition. I appraised just such a four plex back in the bust and there isn't any way you could claim it was all one or the other. And again since UAD does not apply to the property, these code words are just that, code words, like Fair, Average, good... and in this case it is quite apparent the appraiser says one is CONDITION 2 and the other is CONDITION 3...I see no problem with that but in a UAD required report, it would not fly. Either way does not change the gist of the problem. One unit is in better shape than the other. The Q rating OTOH should be the same.

I agree that interior counts. But my comment was in the context of C ratings. I have had similar situations as you described and you are absolutely correct about not being able to call it one or the other. IMO. If they ever decide to use uad for 2-4 family properties. It will take a revamp of the form or a separate set of definitions for 2-4 family properties. Either way it would end up being a cluster ****.

 

[glenn walker]

The appraiser should have used one condition rating because the condition is based on the entire buildings interior and exterior : 1025 Form Non-UAD = ( Average + )

 

[gregb]

What condition rating would apply to a "two family" with one unit suffering nearly total fire damage, and subsequently rebuilt in last year, while the other unit, built in 1985 has had no remodeling or updating aside from paint and flooring?