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Townhome VS Condominium

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USPAP Compliant

Elite Member
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Jan 15, 2002
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Certified Residential Appraiser
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North Carolina
I know the difference. Townhouse..you own the land etc.

I have done maybe four townhomes in 15 years. If I put it on a URAR they want it on a condo form. If I put it on a condo form they want it on a URAR.

The reason lenders want it on a URAR is so they can package it and sell it as a single family home.

Does anyone KNOW where there is any Fannie Mae or Freddie Mac Instructions for doing a TOWNHOME (or TOWNHOUSE). I think I recall something that said you can use either form...but I am just not sure.

I would like to find something I could print out and give to lenders when this comes up.

Thanks,
 

Tim Hicks (Texas)

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Certified Residential Appraiser
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Texas
Check the legal description and zoning. If it is legally a town home, then it should not be put on the condo form. I know, I know, try to explain that to a lender or underwriter. I get condo orders all the time that are actually town homes and legally town homes. I am just lucky, I guess, because I put them on the URAR or 2055 form and don't get questioned. Shucks, now I have jinxed myself.
 
A

Anonymous

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In older cities townhouses are quite common, they are called row houses. If the deed is fee simple you put it on a URAR, if the deed is condo, you put it on a condo form. If the property is fee simple with a homeowners association yoy use the URAR and complete a pud addendum.
 

rtubbs

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Jan 15, 2002
Bob, don't call it a Townhouse. Just describe it as "Attached" in the general description of the improvements (Type (Det./Att.). Seems to me that is all you need.
 

Don Clark

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Jan 17, 2002
Professional Status
Certified Residential Appraiser
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Virginia
8)

Bob,

Big difference between the two. A condominium os a form or ownership. A Townhouse,townhome,etc., is a style of archetecture. If the is no HOA or fees, it does not even need PUD comments for a townhouse/home. A condo requires some from of ownership in common with at least one other unit. I just did one yesterday, finished report today of a 2 unit condo. Very prevalent here in virginia Beach. It is on the Ocean Front. Land is assessed at over $400,000(about 7500 sq ft divided by 2 units). No condo fees, no recreation facilities, but legally titled as a condominium.

I own a Townhouse in Kitty Hawk, NC. We have a HOA. It is fee simple ownership. However, you are right, it confuses the hell out of people. Even the Real Estate Broker who sold it to us kept calling it a Condo. Town of Kitty Hawk says no, it is not a condo. Clerk in city hall on faxing us some papers referred to it as a condo. Yeek :roll:

Way to remeber: Architecture does not a condo make :wink:

A condo is created by condominium declarations and a title as a condo.

Don Clark
 

Jo Ann Meyer Stratton

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Jan 16, 2002
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Certified Residential Appraiser
State
Arizona
And is not created by zoning---that is a competely different matter. Condo ownership evidenced by the deed or CC&Rs is a private restriction. Zoning is a public (local government rules, regulations, etc) restriction.
 
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Florida
Bob,

An old copy of Fannie Mae' s "Appraisal Guide" says:

1. You can use the 1004 for a home that has the condominium form of ownership, ONLY IF the project consists soley of DETACHED dwellings and no common area improvments other than green belts, private streets, and parking areas. If that form is used, include an adequate description of the project, owners association dues and the quality of project maintenance. In other words, you can use the 1004, even if the form of ownership is condominium, as long as the the homes are det. SFR's, and have only the specified coomon elements.

2. Form 1073 (Condo-PUD) is to be used only for single family dwellings only if they are in a condominium, PUD, or cooperative project. Looking like a condo, a PUD, or a coop is not enough. It's got to be one or the other of them to use that form.

Regards,

Tom
 

USPAP Compliant

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Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Thanks to all of you. The Town home I am concerned with is ATTACHED to others. They are built in groups of 6 per building.

I know all the legal differences and I know that it is not legaly a condominium. My question is...are there any specific Fannie Mae or Freddie Mac instructions for Townhomes.

This place does have a homeowner association and there are HOA fees. This type of property is much more LIKE a condo. than a detached s/f home and of course the Condo. Form is far better suited for describing the property.

The only reason to use a URAR form is so the loan can be sold packaged with other s/f homes.

Is there anything in WRITING pertaining to this????

I can surely put it on a URAR with a PUD addendum....but it still seems to be a little misleading to me.


Thanks,
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
The URAR form has a section for the PUD information--why would you need a PUD addendum? The Addendum 70 became obsolete when the "new" URAR came out in December 1993. Do the own the land with specific subject as well as an interest in any common areas? Then the URAR would be applicable---or a 2055 with page two filled out!
 
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Bob,

I cannot find anything I have published by Fannie Mae that refers to the word "Townhouse".

However, the "Appraisal Guide" I paraphased in an earlier post is a publication of Fannie Mae. Further, the same ideas are expressed the copy of Fannie Mae Selling Guide, on page 93.

"The appraiser must indicate whether the subject is located in a PUD, condominium, or a cooperative project. [Note: The appraisal for units in condominium or cooperative projects must be completed on an Appraisal Report - Individual Condominium pr PUD Unit (Form 1073), except that the appraisal for a unit in a condominium project that consists soley of detached dwellings and has no common area improvements (other than greenbelts, private streets, and parking areas) can be documented on the Uniform Residential Appraisal Report (Form 1004) The appraisal for units in a PUD can be completed on either Form 1073 or....Form 1004, as long as the appraiser includes an adequate description of the project and information about the onwers' association fees and the quality of project maintenance on Form 1004.]"


Regards,

Tom
 
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