• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Streamline Refi with Electric tower in backyard.

Status
Not open for further replies.

Joe Sloan

Sophomore Member
Joined
Feb 17, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Owners bought their home with FHA financing 3 years ago. One year after the happy homeowners moved in, the local utility company put up a massive electric transmission tower easily within the fall distance of the site and the home. Owners trying to refi FHA streamline. I know the Underwriter must consider lead based paint, but how about electric Eiffel Tower in subject backyard.(Actually located on the adjoining lot.)

What say the FHA guru's?

Joe
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Joe,

Two Options:

1) Reject it under Location. You look bad to the DEU, unless the DE has a brain and knows the letter trick.

2) Let the DEU waive it. Not likely. I haven't seen a DEU waive any requirements on streamline refis. They're too chicken to do so

Now

How to look like an FHA GOD and impress your client... call the transmission engineering department of the utility and have them give you a letter stating that the tower conforms to the National Electric Code and is designed to collapse inward upon itself. Yep, most utilities have them and they will fax one right over to you. Ergo, no engineered fall distance. Nothing to worry about.......loan closes

Ben
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Wow! Thanks Ben!!!!

Joe,

FHA Streamline Refi Appraisal (I believe) is to completed just like a purchase with all noted necessary conditions/repairs per the handbook on the VC. DEU options after that to waive repairs or not - except any lead base paint issues. I have had DEUs waive many items on the VC for a streamline.
 

Rob Bodkin

Junior Member
Joined
Nov 9, 2002
Professional Status
Certified Residential Appraiser
State
Washington
Great info Ben!

Joe,

The "type" of mortage process doesn't change anything about how we inspect and or report the appraisal for FHA. The Underwriters may have more discretion on a streamline, but we don't change what we do or what we report.

Rob Bodkin
Freestone Partners
 

Judy Whitehead (Florida)

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Florida
I learned the lesson Ben just taught the hard way. We have a massive power line going from a nuclear plant north of us to Tampa to the south. When I first started doing FHA appraisals, I thought no WAY is that thing NOT going to hit a house next to it.

After having a smirky discussion with the engineer with the power company, I learned the difference between "engineered" fall distance and "eyeball" fall distance.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Judy,

I learned it the hard way also. I rejected a 12 unit building of townhomes with a tower in the back due to the fall distance. The DEU didn't know about the letter. The builder went to another mortgage company and the appraiser was an old former FHA staff guy that knew the trick. All the loans closed FHA.

All I did was PO the mortgage company I worked for even though it was the DEU that should have known the trick.

Ben
 

chrisbeaird

Freshman Member
Joined
Jan 29, 2003
Professional Status
Certified Residential Appraiser
State
Texas
HUD says the key is weather the improvements lie within the EASEMENT of the transmission lines. Look at the HUD FAQ question 16 on page 7. I confirmed this with a call to HUD.

They said it was okay for existing homes or new construction as long as the house was not in the easement.

Are easements magical barriers that prevent houses from being squashed by massive power towers?
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
THANK YOU AGAIN BEN!!!

Did a property yesterday, 3rd floor condo. Walk out on the screened balcony to take a picture of the view and the huge power line pole is in the middle of my camera lens!

Looks like a newer power line and be making those phone calls today. Two days ago I would have been having a hissie fit about it. Turns out I would have embarrassed myself.


THANK YOU
THANK YOU
THANK YOU
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Pam,

Here's the HUD stuff:

chapter 1 appraisal and property requirements
hazards and nuisances: overhead high voltage transmission towers and lines page 1-18f




The appraiser must indicate whether the dwelling or related property improvements is located within the easement serving a high-voltage transmission line, radio/TV transmission tower, cell phone tower, microwave relay dish or tower, or satellite dish (radio, TV cable, etc). If the dwelling or related property improvements is located within such an easement, the DE Underwriter must obtain a letter from the owner or operator of the tower indicating that the dwelling and its related property improvements are not located within the tower’s (engineered) fall distance in order to waive this requirement.


Typically,getting the letter ahead of time, saves the DEU the trouble and they are grateful because they don't have a clue as to where the property is located or who to contact at the utility with the Block and Lot legal location of the subject.

Now, reading this, I'm thinking, which is bad for HUD stuff, that in the old days it didn't matter where the house was located. If the tower could fall on it, it was a reject, without the letter. Now they seem to be saying that the house/improvements must be located inside the easement to be affected by the VC1 reject. Strange. But then some letters I've seen also state that the tower is designed to collapse inside the easement ROW, so it's just another way to approve the location, I guess.

Depending on how clear the wording is in the letter, you can 1)Reject it under VC1, attach the letter to the report, call the underwriter's attention to the letter and let him/her remove the reject based on the info in the letter 2) If the wording is clear as to the tower being designed to collapse inward or in the ROW, then you can proceed as usual referencing the letter as the basis for your decision.

Ben
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks