New Construction Loan on 1004 without site value?

[VonTooley]

Ok, we had a client request an appraisal on 8 separate pre-construction floor plans (8 reports). I have done plenty of new construction appraisals, however this is for a new subdivision and the builder has not determined which floor plan is going on which site. So, the client is requesting the appraisal on the construction floor plans alone and exclude the site value in the hypothetical "As-Complete" final value opinion.

Is this possible to do on a Form 1004 and can the comparable sales just be adjusted for site value (extraction method)? And be in compliance with Fannie Mae?

Any help would be great!

 

[DWiley]

As for compliance with Fannie Mae, the Fannie Selling guide says:


How does one provide the "actual site size" if there is no site?

Also, without a site (or more accurately, rights to a site), the "subject property" would not be real property.

Having said that, in my experience it was not totally unusual for bank lenders with new construction departments to order appraisals based on a home being built on a "typical" or "average" lot in a development. They would then use those "typical lot appraisals" for multiple construction loans, updating them from time to time as market conditions required. Those were obviously not Fannie Mae deals.

 

[VonTooley]

DWiley,
That is what I was thinking. Thanks for your help!

 

[KONA]

Sounds like the lender is making a construction loan not take-out loans. Even so, the site value is needed.

 

[sputnam]

Sure it's possible. However, there is a form designed just for this situation. The key thing...if they want it on the 1004... be sure to add as much commentary as necessary so that a reader isn't confused about what you did.

 

[VonTooley]

Thanks guys! I had 8 of these reports for the client, so we sent in the first report last week and had 2 revision requests. Fixed the issue and submitted the other 7 on Tuesday. They were all accepted

We used the 1004 and had a lengthy text addendum to clarify conditions. They wanted builder construction costs in the reconciliation , but no one was able to supply them to use by the deadline.