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My Fannie & A Hole In The Ground

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David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
I posted earlier about a property with a sinkhole next to the house. I have now inspected the property, and it is a huge one. About 20' deep and 25' across, & keeps getting bigger everyday! I am coming to the conclusion that it may have minimal value if any, due to the fact that you can't get financing for it. I know it's a reject for HUD under VC-1 (right at the top of the list!), but does anyone have a link to FNMA guidelines or know a specific reference where subsidence or sinkholes make a property ineligible under FNMA guidelines? What about VA guidelines? Do any of yuo VA guys know the specifics about this issue?
 

Kevin A. Spellman

Senior Member
Joined
Aug 30, 2003
Professional Status
Certified Residential Appraiser
State
Massachusetts
I would only discuss the house value and not the land value. The theory for the principal of contribution should be the discussion. Can the house be moved to another section of the site, which is stable, or can the home be move to another site. Is this physically and financially feasible?

Are there a municipal procedures when a sinkhole threatens a home and when does the municipality become involved. Introduce the term market resistance and profile the typical buyer, which would create the market resistance. I believe market resistance would be evident with a sinkhole. In all likelihood your subject has failed to support the definition of market value.
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
FNMA & VA guidelines as to the eligibility of properties with sinkholes. That's all I'm looking for.
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Nevermind about the FNMA guidelines; I just found a website with the current (06/30/02) Federal National Mortgage Association Real Estate Appraisal Guidelines & printed out the manual. Now aren't there any VA appraisers out there who can get me a reference on those guidelines?
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
I would want an engineering study of the site and the sinkhole before I did ANYTHING. That house may well be setting over a portion of the sinkhole. Call for a study and RUN.

Roger
 
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