Quality

[Terrel L. Shields]

guess those guys who were doing the renovations, made-up their loss on each house by selling in volume.

That's the Texas Aggie watermelon method. Buy melons for $1, sell them for $1 and then buy a bigger truck ...volume.

 

[Terrel L. Shields]

Q ratings? Are they not really supposed to be separate issue from the condition rating? I mean, condition should be independent of quality. And by definition would a Q6 not be suffering from substantial functional obsolescence?

 

[residentialguy]

A lender not financing on Q6 is not our problem. The appraisal is to opine value and report property quality and conditions, not ensure financing. Appraisers need to separate out a lender concern with an appraisal concerns.

There is no edict from fannie about you can not use Q6 or C 6, it is just that most lenders want a C6 subject to repair, but that might not be true for an REO assignment from client., they might want a C6 house " as is" ( which might make it a tear down)

Q6 is the very low quality or the low quality with deficiency per the Q6 definition... it might make the property ineligible for financing but that is not our concern, is it?

Per FNMA guidelines, Condition Ratings C1, C2, C3, C4, and C5 are eligible for delivery in “as is” condition. Properties with the initial Condition Rating C6 indicate one or more deficiencies that impact the safety, soundness, or structural integrity of the property. Therefore, the appraisal must be completed subject to completion of the deficient item(s).
Same with Q6. I can't think of a situation where anything is rated a C6 or Q6 without impacting the safety, soundness, or structural integrity of the property.

If the lender won't accept it, then it must be made subject to repair in order for the appraisal to be meaningful. That is a lender requirement that you have to know.

 

[J Grant]

C6 is a different category than Q6. . To be eligible For Fannie lending, yes in appraisal a C 6 must be made subject to repair . But for Q6 it says this:

Properties with a quality of construction rating of Q6 are eligible for sale to Fannie Mae provided any items in relation to the quality of construction that impact the safety, soundness, or structural integrity of the property are repaired prior to the delivery of the loan. See Physical Deficiencies That Affect Safety, Soundness, or Structural Integrity of the Subject Property in this topic for requirements when completing appraisals on properties with safety, soundness, or structural integrity deficiencies.

I agree with you it's hard to imagine a Q6 not needing some kind of repair or remediation but I suppose it is possible. Fortunately I've never encountered a Q6, only Q 5.

 

[residentialguy]

C6 is a different category than Q

No, it's the same. If the poor quality affects the SSS, like C6, they must be repaired.

Physical Deficiencies That Affect Safety, Soundness, or Structural Integrity of the Subject Property
The appraisal report must identify and describe physical deficiencies that could affect a property’s safety, soundness, or structural integrity. If the appraiser has identified any of these deficiencies, the property must be appraised subject to completion of the specific repairs or alterations. In these instances, the property condition and quality ratings must reflect the condition and quality of the property based on the hypothetical condition that the repairs or alterations have been completed.

 

[Terrel L. Shields]

Therefore by definition a Q6 must be substandard housing. No house should be unsafe quality without bypassing even the most rudimentary inspection. This relates to condition and the two should not be confused.

 

[Mr Rex]

No, it's the same. If the poor quality affects the SSS, like C6, they must be repaired.

Physical Deficiencies That Affect Safety, Soundness, or Structural Integrity of the Subject Property
The appraisal report must identify and describe physical deficiencies that could affect a property’s safety, soundness, or structural integrity. If the appraiser has identified any of these deficiencies, the property must be appraised subject to completion of the specific repairs or alterations. In these instances, the property condition and quality ratings must reflect the condition and quality of the property based on the hypothetical condition that the repairs or alterations have been completed.

Just making stuff up is fake news.

Properties with a quality of construction rating of Q6 are eligible for sale to Fannie Mae provided any items in relation to the quality of construction that impact the safety, soundness, or structural integrity of the property are repaired prior to the delivery of the loan. See Physical Deficiencies That Affect Safety, Soundness, or Structural Integrity of the Subject Property in this topic for requirements when completing appraisals on properties with safety, soundness, or structural integrity deficiencies.

 

[Deleted member 130081]

In your market area, what residential characteristics would bump a home from a Q3 to a Q2 rating in one of your reports? I ask because while I have tried to go by UAD guidelines, there frankly are not a lot of high quality homes in my market area. In the few reviews I have done, it seems like sometimes other appraisers are going with better quality ratings on a home than I would have in some instances.

Any thoughts appreciated!

So it is what it is, your market has few higher-end homes. While the Q ratings are specific, there is still a little room for interpretation and a ton of room for cross-over/mix and for significant differences within the same Q rating. The first is when you see a home built with different qualities of components, rather than being built to a consistent quality throughout. The second is when you have a more subtle difference with the same Q rating, where two properties would still be best rated as the same Q rating, yet an adjustment might still be appropriate. I think this second scenario sets the scene for an appraiser to fudge the Q ratings a bit on properties, as it is easier and less confusing for a reader to see and understand. Maybe this is what you are encountering.

As far as what the ratings are, they are pretty specific and IMO, align with Marshall and Swift pretty good. None of it is perfect, but it is still better than the old way. Its also great for the national database of homes we have been populating for the last 10 years.

And on a side thought, I wonder if Corelogic will buy FNMA someday?

 

[Eli]

If this is for FNMA UAD 1004, you actually can not state Q6 or C6 on the SCA grid. Those are automatic "subject to repair"...and with "subject to", your SCA must always reflect the as repaired condition & quality. In your comments, you state that upon inspection it was C6 and/or Q6, thus required by FNMA UAD guidelines to be repaired.

Most likely the lender won't finance q5 or c5 either, so the above would hold true for those ratings as well. I've seen many reports show the before repair condition on the SCA... Think of New Construction. That's how you handle "subject to"...the report must always reflect the as repaired/as completed state.

Yeah. Don’t do fair condition on the 1004 either if it is a purchase or refinance. Do it “ subject to” before you do fair condition on a purchase or refinance in the improvements section on the 1004.

 

[residentialguy]

Just making stuff up is fake news.

Just what is it that you think I'm making up there? That was a direct quote from FNMA selling guide. It must be made subject to repair if the Q6 affects the 3 S's
Looks like YOU are making stuff up....or rather you just don't know what you're talking about.