I say it falls under the SOW Rule
Bingo. An Assignment Condition may require an estimate of site value without a Cost Approach under SOW. If no Assignment Condition requirement, and the CA is opined to be applicable but not necessary to produce credible assignment results, a site value estimate is not required. (SR 1-4(b))
Examples:
Subpart 4, Underwriting Property
Chapter 1, Appraisal Guidelines, Appraisal Report Assessment
March 2, 2010
B4-1.4-19, Appraisal Report Review: Cost Approach to Value (04/01/2009)
Introduction
This topic contains information on the cost approach to value.
Evaluating Cost Approach to Value
The table below provides requirements for evaluating cost approach to value.
Evaluating Cost Approach to Value
Appraisals that rely solely on the cost approach as an indicator of market value are
not acceptable.
Fannie Mae does not require the cost approach to value except for the valuation of
manufactured homes.
FHA 4150.2 http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/41502appdHSGH.pdf
Section 9 – Cost Approach Pg 35
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]If the subject property is new construction (less than one year old), or the Cost Approach is recognized in the market as a basis for pricing, the appraiser may complete the Cost Approach; however, it is not required for an FHA appraisal. If, however, the subject is a unique property, has specialized improvements, is manufactured housing, or the client requests the Cost Approach be completed, then the Cost Approach is required and must be completed. The square foot method is to be used. [/FONT]
[FONT=Times New Roman,Times New Roman]• State the Remaining Economic Life as a single number or as a range. This line must be completed for every FHA appraisal whether or not the cost approach is completed. An explanation is required if the remaining economic life is less than 30 years. [/FONT]
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