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New Construction & Certified Plans/Specs.

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rtubbs

Thread Starter
Junior Member
Joined
Jan 15, 2002
Can anyone direct me to the document that requires Certified Plans & Specs on FHA insured new construction?

I'm appraising a property that is virtually complete and I know that HUD requires plans/specs, builder's certificate, etc. I'm just not sure of where the requirement is for "Certified" plans & specs.

Ron in Alabama
 

rtubbs

Thread Starter
Junior Member
Joined
Jan 15, 2002
yep, gottem. got plans and specs. mortgage co is telling the builder that they gotta be "certified". just wondering what will happen to lil old me if I turn in an appraisal without having reviewed "certified" plans/specs. maybe someone can enlighten me as to why HUD requires plans & specs on properties that have already been completed-never did understand thay one.

ron in alabama
 

AC King

Sophomore Member
Joined
Jan 20, 2002
Plans and specs are for hypothetical properties. If a property exists, that is what must be appraised. Too many times what the builder proposed and the buyer wanted is not what is in fact constructed. You must appraise what exists not what was wished for.

If you use the plans and specs in order to form an opinion of value on a completed property, then you typically have a lot of writing to do in order to explain what isn't there according to the documentation furnished. I find myself explaining that to lenders quite often when an FHA appraisal is requested.

It is a never ending battle, but common sense must dictate sometimes.
 

rtubbs

Thread Starter
Junior Member
Joined
Jan 15, 2002
AC, this is HUD's directive:

"NOTE: Appraisers must receive a fully executed form HUD-92541, Builder's Certification of Plans, Specifications, & Site, before performing the appraisal on proposed, under construction or less than one year old properties..."

I agree with your rationale but, heck, who said HUD had to rationalize anything.

Maybe I just answered my own question. Maybe the Builder's Cert certifies the plans.

Ron in Alabama
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
"Certified"

HUD/FHA just likes that word a lot so uses it everywhere they can fit it in.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
On the plans that you received, write your name and effective date of the opinion of value before giving it back to the client--not the builder. That is what most lenders mean when they want plans "certified". You are not certifying anything, you are only signing off on the information you used in developing your opinion of value.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Jo Ann,

Doesn't the handbook say somewhere that the appraiser is supposed to keep a set of plans in their workfile to compare at completion? Now I'm going to have to go look that up since I could be wrong.
 

AC King

Sophomore Member
Joined
Jan 20, 2002
Ron,

One of the things I like about the new HUD Handbook 4150.2 is that whenever it requires something, there is also away to get around it.

Under 5-1, A. PART 1: UNIFORM RESIDENTIAL APPRAISAL REPORT (URAR) 1. Departure from HUD Requirements. ......Any departure from these requirements must be explained in the URAR........

So, for me it is easier to explain why I did not use plans and specs on a completed home than it is to explain why the plans and specs were not altogether accurate.

So, you see, even HUD allows for common sense sometimes. I know that may surprise a lot of FHA appraisers. But I've been doing them so long, I've had to find the means for completing reports to satisfy my own rationale.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Pam:
I make a copy of the floor plan for my file and a copy of all specifications. I honestly don't know if anything is in the Fannie Mae Guidelines, they are only guide lines. But the copies of the floor plans and specifications have been sufficient for me. After all I am not a licensed contractor or building inspector or engineer, etc, etc so the complete set isn't necessary IMHO. My observations are for valuation purposes only. So if they used sheet vinyl instead of top of the line ceramic tile or hardwood floor--then that would be obvious when I am walking through the house. Or if the house has 3 bedrooms instead of 4, and the GLA is 500 sq ft less, that would also be obvious (and a completely new appraisal would need to be done) and not just a 442.
 
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