C REA
Freshman Member
- Joined
- Jul 8, 2007
- Professional Status
- Certified Residential Appraiser
- State
- Florida
Existing or Under Construction,
As was previously listed in a similar thread regarding USDA, HUDs Construction Definitions are as follows:
Proposed Construction are properties approved for mortgage insurance prior to the beginning of construction, defined as the first placement of concrete or other permanent materials. This means that the DE Statement of Appraised Value or Early Start letter has been issued by the DE Underwriter for the property prior to the first placement of concrete or other permanent materials.
Under Construction are those properties in which the first placement of concrete or other permanent materials has begun, but construction is not yet 100% complete.
Existing Construction properties that are 100% complete at the time of appraisal. "Complete" means everything is complete including the installation of buyer preferences (flooring, appliances, etc.), utilities are on and fully functioning and all site improvements completed at the time of appraisal (Ready for Occupancy). If no repair or correction conditions are made by the appraiser, the appraisal serves as the final inspection as per HUD Handbook 4145.1 Paragraph 6-3-A(3).
However, HUD also provides the following definitions:
•Existing Construction: Property is at least one year old at the time of the appraisal.•Proposed Construction: Property is approved for FHA mortgage insurance prior to the beginning of construction.•Under Construction: Construction is under way but is not completed at the time of the appraisal.
•Existing Construction Less Than One-Year Old: Property is less than one year old at the time of the appraisal.
This guidance appears to conflict with the preceding definitions.
Specifically addressing whether to report a property as Existing or Under Construction.
A property that is 100% complete and say six months old, which is correct?
The first definition classifies an Existing property as one that is 100% complete. But the latter classifies an Existing property as one that is at least one year old.
There is no check box for Existing Construction less than one year old.
As was previously listed in a similar thread regarding USDA, HUDs Construction Definitions are as follows:
Proposed Construction are properties approved for mortgage insurance prior to the beginning of construction, defined as the first placement of concrete or other permanent materials. This means that the DE Statement of Appraised Value or Early Start letter has been issued by the DE Underwriter for the property prior to the first placement of concrete or other permanent materials.
Under Construction are those properties in which the first placement of concrete or other permanent materials has begun, but construction is not yet 100% complete.
Existing Construction properties that are 100% complete at the time of appraisal. "Complete" means everything is complete including the installation of buyer preferences (flooring, appliances, etc.), utilities are on and fully functioning and all site improvements completed at the time of appraisal (Ready for Occupancy). If no repair or correction conditions are made by the appraiser, the appraisal serves as the final inspection as per HUD Handbook 4145.1 Paragraph 6-3-A(3).
However, HUD also provides the following definitions:
•Existing Construction: Property is at least one year old at the time of the appraisal.•Proposed Construction: Property is approved for FHA mortgage insurance prior to the beginning of construction.•Under Construction: Construction is under way but is not completed at the time of the appraisal.
•Existing Construction Less Than One-Year Old: Property is less than one year old at the time of the appraisal.
This guidance appears to conflict with the preceding definitions.
Specifically addressing whether to report a property as Existing or Under Construction.
A property that is 100% complete and say six months old, which is correct?
The first definition classifies an Existing property as one that is 100% complete. But the latter classifies an Existing property as one that is at least one year old.
There is no check box for Existing Construction less than one year old.
