Subject Property Not ANSI Compliant

[Zer000]

So I am appraising a property for a conventional refi, it is a detached SFR built in the late 1800's in an older borough. The problem is that all the ceilings on both floors are below 7' in height, some are so low on the second floor that the top of my head was touching the ceiling. Now according to ANSI this would technically be a house with 0 GLA, so I am struggling with how to approach this. As of right now after some discussion with others is to use the GXX001 code and proceed like a normal report. Does this seem like an appropriate use of this code? Typically in my area the normal non ANSI compliant areas are 3rd floor attics with sloped ceilings which are usually less than 500 square feet, the subject property is 1500+ square feet. I'm not really sure how else to proceed (the lender has told me to proceed) because the cost to cure would be insane and realtors are terrible in my area in regards to ANSI so finding comps with low ceilings are a guessing game with MLS photos, and trying to extract a market reaction to low ceilings seems impossible. Just wanted to see what you guys think, thanks!

 

[Mike Ault]

So I am appraising a property for a conventional refi, it is a detached SFR built in the late 1800's in an older borough. The problem is that all the ceilings on both floors are below 7' in height, some are so low on the second floor that the top of my head was touching the ceiling. Now according to ANSI this would technically be a house with 0 GLA, so I am struggling with how to approach this. As of right now after some discussion with others is to use the GXX001 code and proceed like a normal report. Does this seem like an appropriate use of this code? Typically in my area the normal non ANSI compliant areas are 3rd floor attics with sloped ceilings which are usually less than 500 square feet, the subject property is 1500+ square feet. I'm not really sure how else to proceed (the lender has told me to proceed) because the cost to cure would be insane and realtors are terrible in my area in regards to ANSI so finding comps with low ceilings are a guessing game with MLS photos, and trying to extract a market reaction to low ceilings seems impossible. Just wanted to see what you guys think, thanks!

I would have no issue invoking the GXX001 code for that particular property. Seems to be tailor-made for the situation. If I were doing the appraisal, I would discount it under the functional utility portion of the grid, and support my adjustment by the best means possible. Sometimes you have to look at things like that, shake your head, and then tell yourself "well, it's got to be worth something", and get to work.

 

[Dublin ohio]

Whether or not you invoke the code or not. The problem remains the same. Finding comparable sales with similar ceiling height.

 

[Terrel L. Shields]

Asking someone to modify a house to satisfy ANSI is a ridiculous thing to contemplate. Evoke the exception and go on. Otherwise simply state the SF is zero GLA and then adjust the non-GLA on a separate line as if it were GLA. Just because something is not GLA does not make the market pretend it does not exist.

 

[Elliott]

Sounds like a question DW could answer.

There is this, but read the comments too:

Solving the ANSI Measuring Dilemma - A Simple Work Around

...a brilliant ‘work around’ to solve the subject & comps adjustment issues, which Fannie Mae thinks is no big deal... Appraisers, I was chatting with an

appraisersblogs.com

 

[Dublin ohio]

The exception code was not made for this situation. ANSI only defines above or below grade finished area. Not GLA. Fannie defines GLA. The exception code is meant for berm homes, hillside homes etc. where there is no ANSI "above grade" finished area.

 

[Mike Ault]

The exception code was not made for this situation. ANSI only defines above or below grade finished area. Not GLA. Fannie defines GLA. The exception code is meant for berm homes, hillside homes etc. where there is no ANSI "above grade" finished area.

The subject does not have "typical above grade square footage" yet has demonstrated market acceptance. IMO, the use of the exception code would be appropriate in this circumstance.

If the appraiser is unable to adhere to the ANSI standard, they must
enter “GXX001-” at the beginning of the Additional Features field of
the appraisal report and provide an explanation of why they were
not able to comply. For example, if the appraiser is performing an
appraisal in a state that requires appraisers to adhere to a different
measuring standard, the appraiser may use the exception code and
the loan may still be eligible for purchase by Fannie Mae. See the
Gross Living Area section of Selling Guide B4-1.3- 05, Improvements
Section of the Appraisal Report for more information.

 

[CGinMN]

The exception code is meant for berm homes, hillside homes etc. where there is no ANSI "above grade" finished area.

There is no ANSI above-grade finished area in this scenario, so wouldn't the exception be similarly appropriate?

 

[Dublin ohio]

If the appraiser is unable to adhere to the ANSI standard,

What part of the described subject cannot be measured to the ANSI standard? ANSI only deals with above or below grade finished area. The subject obviously has above grade finished area.

 

[BRCJR]

The ANSI home measurement standard has a few key elements that you should be aware of:

1. It applies only to single-family housing. It doesn’t apply to apartments, condos, or commercial property.
2. The measurement standard is from the exterior walls and includes the area on each floor above grade based on exterior measurements including stairwells but excluding open areas.
3. The standard requires a minimum ceiling height of seven feet. In second-story areas with sloped roofs living area starts at 5 feet on the slope, and 50% or more of the ceiling has to be 7 feet or above.
4. Living space that is below grade, even if it's only a foot or two, is to be considered basement space.
5. The standard requires that the property to be measured to the nearest inch or one-tenth of a foot.