Shared well.and septic.and.

[CGgonnabee]

I just saw a piece of property...there was nothing unusual about the property report that I downloaded from the county website. Get back to the office, start checking on zoning data in the county GIS and find that the house next door is located on the subject property (daughter's double-wide) which is ~1.5 acres. Additional research shows that the daughter's home is in the real estate records but is categorized as "improvements only"

I call the owner and ask about the situation and she says to only value her house and the land. A few more questions...they share well and septic. I asked if the lender knows about the daughters home...she says yes.

I call the lender and they were told about the subject house and a shed. They ask if the extra DWMH could be classified as a guest house. I tell them the daughter's house is larger than the subject, and furthermore, the borrower does not have any ownership interests in the daughter's house.

I say it won't work. MB wants to be creative (and rude).Any thoughts? Anyone ever run into something like this? I can't get thru to HUD today.

 

[Mr Rex]

This may help, pages 7 & 8:

http://www.HUD.gov/offices/hsg/sfh/appr/aprval.pdf

but it sounds like it might not fit the requirements. I'd call the HOC and ask them for some guidance

 

[RSW]

I can't say anything other than take Rex's advice.

 

[CANative]

I assume that the entire property is ~1.5 acres and contains the residence that the borrower lives in as well as the MH and that the well and septic is shared by both.

Any thing on the property must meet MPR. The MH must be built to the HUD code and have a permanent foundation which meets the requirements of HUD handbook PFGMH. Once the foundation becomes permanent it becomes part of the land and the landowner will own it. They can't have their cake and eat it too.

 

[Jo Ann Meyer Stratton]

"the borrower does not have any ownership interests in the daughter's house."

Since the borrower does not have any ownership interest in the daughter's house, the daughter's house would not be included in the appraisal assignment (or used as collateral for the mortgage). However the appraisal report for what the borrower does own should have a paragraph in the report that a manufactured home not in the borrower's ownership is located on the site and not included in the final opinion of market value. Describe and explain everything--then it becomes the underwriter's problem of how to solve it.

 

[CANative]

Section 5 – Improvements

This section describes the subject improvements. Accurately report the conditions observed. Describe needed repairs, or the existence of any functional or external obsolescence. Enter factual information on each of the lines provided and report the conclusions. Consider all aspects of the physical description and reconcile them in the opinion of market value.

Accessory Unit / Accessory Dwelling Unit
The accessory unit is defined as a habitable living unit added to, created within, or detached from a single-family dwelling that provides the basic requirements for living, sleeping, eating, cooking, and sanitation.

“Accessory dwelling unit" means a subordinate dwelling unit may or may not be incorporated within, or detached from a single-family structure. Accessory units may not be subdivided or otherwise segregated in ownership from the primary residence structure.

0987654321

 

[ghrousseau]

From Page 7:

4. If there is a manufactured home on the property, does it have to meet FHA standards if it is only being used for storage or has a family member living in it, but is NOT paying rent?
If the manufactured home being used for storage is not in compliance with FHA requirements; does not pose any health and safety issues by its continued presence on the property; is in compliance with the regulations of local jurisdiction; and is not functioning as a living unit (kitchen rendered inoperable), then the property could be eligible for FHA-insured financing, assuming all other site and property improvements are in compliance with FHA standards. If the appraiser places value on the manufactured home, the value can only be contributory value as a storage or accessory building and not as a living unit.
If the manufactured home is used as a living unit and is not in compliance with FHA requirements, the property is not eligible for FHA-insured financing unless the manufactured home is removed from the property.


Seems pretty cut and dry. If it was being used as storage then there wouldn't be an issue. I don't know about the ownership interest. If the DWMH is sitting on moms site, but the daughter is listed on the clear DMV title, then wouldn't it be an encroachment?? If the DE underwriter would like to contact the HOC and get a ruling on it in writing, then you would have some leeway. Sounds like it's a problem as it sits. Good luck on that one, but be careful.

 

[Jo Ann Meyer Stratton]

“Accessory dwelling unit" means a subordinate dwelling unit may or may not be incorporated within, or detached from a single-family structure. Accessory units may not be subdivided or otherwise segregated in ownership from the primary residence structure

The daughter's manufactured home is seqregated in ownership from the land, improvements to the land and improvements on the land. Therefore it cannot be encumbered by the parent's mortgage because the parents do not have any ownership in that specific manufactured home. The lender may require a lease or rental agreement of the land where the daughter's manufactured home is located but that would be the underwriter's decision. But the daughter's manufactured home itself would not be included in the opinion of market value or included the appraisal report. Other than comments in the report that a manufactured home is located on the site that is NOT in the ownership of the land owner.

Since it is not included in the borrower's ownership or mortgage it does not have to met HUD requirements since it is not part of the collateral.

 

[CGgonnabee]

In the FHA Addendum of the report I included the following:

Reportable Conditions:

The appraiser has valued the subject double-wide mobile home and ~1.5 acres.

The appraiser has determined that the owner's daughter owns/occupies a double-wide mobile home that is also situated on the subject site (see site map from the County Geographic Information System included in the addendum).

Other relevant facts regarding this reported condition:

A. The additional double-wide is taxed as real estate and public records indicate that the owners of record are Jack and Jill , daughter and son-in-law of the owners/borrowers.

B. The owners/borrowers and daughter/son-in-law share a well and septic system.

C. The appraiser did not inspect the double-wide belonging to the daughter of the owners/borrowers.

D. The appraiser has concluded that the shared well and septic system and the additional residential structure (not owned by the borrowers) warrant special consideration by the lender and HUD.


In light of the above information, the appraiser is unable to provide a determination as to compliance with Mininum Property Requirements (MPR) and/or Minimum Property Standards (MPS).

:mellow: I will let you know what happens. I appreciate all the feedback.

 

[CANative]

JAMS, it's forum suicide to question anything you may post, but I'm not sure if your position is convincing.

Let's take out any interpretations and boil the Q&A down:

Question:

If there is a manufactured home on the property,

Answer:

If the manufactured home is used as a living unit and is not in compliance with FHA requirements, the property is not eligible for FHA-insured financing unless the manufactured home is removed from the property.

You cited the this portion of the ADU discussion ...

Accessory units may not be subdivided or otherwise segregated in ownership from the primary residence structure

but then offered an opinion or interpretation..

The daughter's manufactured home is seqregated in ownership from the land

I would have thought that the "may not be subdivided or otherwise segregated in ownership from the primary structure" is there to help prevent highest and best use errors. The real issue is that the use of the real estate existing includes a manufactured home, connected to the utilities and used as a living unit. It's not a valuation problem, it's just the fact that it is there and doesn't meet several minimum property requirements, which fails the entire property. Like an old shed on the back 40 with some peeling paint causing a LBP emergency even though the main residence is brand new.

m2:

You probably know best but I'd be kind of nervous treating this the way you describe.