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(g)
Appraisal requirements for properties subject to resale restrictions
The appraisal report must note the existence of any resale restrictions. Additionally, the appraisal must include an analysis that addresses any impact the resale restrictions have on the property’s value or marketability.
(i)
Resale restrictions survive foreclosure or recordation of a deed-in-lieu of foreclosure
When the resale restrictions survive foreclosure or recordation of a deed-in-lieu of foreclosure, the appraisal must reflect the impact the restrictions have on the subject property’s value and when available, be supported by comparable sales with similar restrictions.
If recent comparable sales with similar resale restrictions are not available in the subject neighborhood, the appraiser should then use similarly restricted older comparable sales from the subject neighborhood or consider recent and older similarly restricted sales from competing neighborhoods as comparable sales or as supporting market data. When comparable sales with similar resale restrictions are not available, the appraiser may use comparable sales with different resale restrictions or comparable sales without resale restrictions as long as the appraiser can justify and support their use in the appraisal report.
(ii)
Resale restrictions terminate upon foreclosure (or expiration of any applicable redemption period) or recordation of a deed-in-lieu of foreclosure
When the resale restrictions terminate upon foreclosure (or expiration of any applicable redemption period) or recordation of a deed-in-lieu of foreclosure, the appraisal must reflect the market value of the property without resale restrictions by using comparable sales that are not resale restricted.
The Seller, or any third party authorized by the Seller, must ensure that the Borrower and appraiser are aware of the resale restrictions and must advise the appraiser that he or she must include the following statement in the appraisal report:
"This appraisal is made on the basis of a hypothetical condition that the property rights being appraised are without resale and other restrictions that are terminated automatically upon the latter of foreclosure or the expiration of any applicable redemption period, or upon recordation of a deed-in-lieu of foreclosure."
(h)
Value and calculation of loan-to-value (LTV), total LTV (TLTV) and Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios
(i)
Resale restrictions survive foreclosure or recordation of a deed-in-lieu of foreclosure
For a purchase transaction, “value” is the lesser of the appraised value of the Mortgaged Premises on the Note Date or the purchase price of the Mortgaged Premises and for a refinance transaction, “value” is the appraised value.
(ii)
Resale restrictions terminate upon foreclosure (or expiration of any applicable redemption period) or recordation of a deed-in-lieu of foreclosure
For purchase and refinance transactions, value is the appraised value of the property without resale restrictions as determined in accordance with the requirements of
Section 4406.1(g)(ii).
(i)
Underwriting
Mortgages secured by properties subject to resale restrictions may be manually underwritten or submitted to Loan Product Advisor®. When using Loan Product Advisor, for a Mortgage secured by property subject to resale restrictions that terminate upon foreclosure or recordation of a deed-in-lieu of foreclosure, the Seller must enter the appraised value determined in accordance with
Section 4406.1(g)(ii) in the purchase price field and the appraised value field.
(j)
Special delivery requirements
See
Section 6302.37 for additional special delivery instructions for Mortgages secured by properties subject to resale restrictions, including special instructions for Mortgages secured by properties subject to resale restrictions that terminate upon foreclosure (or expiration of any applicable redemption period) or recordation of a deed-in-lieu of foreclosure, where the property value must be determined in accordance with
Section 4406.1(g)(ii).
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