Unpermitted ADU (1004 & 1007 question)

[Mike Ault]

No can do if the zoning is for SFR's and not 1 to 4 units.

The OP was contemplating reporting the appraisal on the wrong form & just mentioned lack of permits. The multifamily aspect would blow up most loans that the borrower was shopping regardless and the assignment will in all probability be canceled once the lender is brought up to speed on the nature of the collateral.

 

[Surf Cat]

the assignment will in all probability be canceled once the lender is brought up to speed on the nature of the collateral.

The unscrupulous AMC wants their cut of the appraisal fee.... I'll wager they push the appraiser to proceed. They'll just state "we didn't know.... we paid the appraiser so you have to pay us for the assignment".

 

[Mike Ault]

The unscrupulous AMC wants their cut of the appraisal fee.... I'll wager they push the appraiser to proceed. They'll just state "we didn't know.... we paid the appraiser so you have to pay us for the assignment".

That's when the appraiser has the responsibility to renegotiate the assignment to be completed on the proper form. We can't just complete assignments on the wrong form, we are the professionals, not the client. Once the AMC gets the appraiser's request for the associated "fee increase," they will cancel it themselves.

 

[ZZGAMAZZ]

Per Fannie Mae "Only one ADU is permitted on the parcel of the primary one-unit dwelling". FHA only allows one ADU per single family home. You might want to check with your client to see if they even want to do a loan on a property with 2 ADUs.

 

[Tom D]

Don't do it. Don't put you foot into that bear trap. The owner is being slick with unpermitted units and maybe unpermitted rentals. Don't think his fire insurance company goes along with that plan.
Don't be caught with the perception that you and the owner are both being slick. And the fire insurance not paying because of illegal uses.
And you said it was alright. Yes you honor, that's what i wrote. And yes my state board, that was my perception. How many fines can they find on that appraisal.

I don't do appraisals for slick owners.

 

[sputnam]

I'm not sure why this sort of question keeps coming up. If you are being asked to develop market value, you have to do a Highest and Best Use Analysis. One part of that process asks. Is the use allowed.

 

[Mike Ault]

I'm not sure why this sort of question keeps coming up. If you are being asked to develop market value, you have to do a Highest and Best Use Analysis. One part of that process asks. Is the use allowed.

The OP never mentioned "zoning". So we don't know if multi-family use is allowed or not.

 

[sputnam]

The OP never mentioned "zoning". So we don't know if multi-family use is allowed or not.

And I didn't mention "zoning" either.

 

[Tawfik Ahdab]

Be loathe to become part of homeowners’ shady schemes.

Caveat aestimator.

My girlfriend was watching one of those remodeling shows on TV and a lady realtor/investor was bragging about splitting an existing detached 2 bedroom ADU into two separate 1 bedroom ADUs under the radar to boost income.