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Rural Development

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BSBRose21

Thread Starter
Freshman Member
Joined
Dec 16, 2008
Professional Status
General Public
State
Wisconsin
I would like to know what an appraiser looks for while doing an appraisal for a USDA Guaranteed Loan. Right now the house has no furnace, no water heater, and a bad roof. These items are planning to be financed into the loan provided the appraisal is high enough. My question is how do you perform an appraisal on this? Is the value an as improved or as is now?
 

conwayblue

Sophomore Member
Joined
Nov 6, 2003
Professional Status
Certified Residential Appraiser
State
Arkansas
USDA loans use FHA standards. Appraisal would be completed "subject to completion" of the furnace, water heater, and roof. The home would be valued as if the repairs were already completed. Once repaired the appraiser would complete a final inspection.

If you want to borrow the money to complete the repairs it may be better to look at a FHA 203k loan.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
USDA has a similar "rehab" program to FHA's 203k. I can't remember what they call it.
 

David Beasley

Senior Member
Joined
Dec 12, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
Appraisal would be completed "subject to completion" of the furnace, water heater, and roof.

Tread lightly with this advice. "Subject to completion" on anything but proposed new construction in these parts will get an appraisal kicked back for correction. I would think it should be submitted "subject to repairs" and the value opinion would then be "as repaired".

This is because of everything that follows "subject to completion" there on page 2: subject to completion per *plans and specifications*... So IMHO, 'subject to completion' has nothing to do with "repairs" but has everything to do with appraising a property from the plans and specs when the improvements don't exist yet. According to the original post, the home exists, and cannot be subject to completion, but it's missing amenities can be called for as subject to repair (based on the hypothetical condition that the repairs have been completed).
 
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