USDA Appraisal Order - Need Help

[PropertyEconomics]

I'm so glad that I saw and read this. I just accepted my first USDA order. I do have a question though...does the property have to be marked as Rural on the 1004 page 1 in order for the USDA loan to be approved?

This client also requires the USDA Rural Development Existing Dwelling Inspection Report.

Rural Development loans, both guaranteed and direct, are only available in towns of less than 20,000 residents. Business and Cooperative loans (ie commercial type loans) can be made in communities containing no more than 50,000 residents.

Should anyone have questions, each state has a chief appraiser, called a State Appraiser, that can be a good source of information for appraisal requirements and anything special a given State Appraiser might look for. Calling the State Rural Development office and asking for the appraiser is a great way to get your questions answered. States can set their own requirements and this is often done by the Rural Housing team and the State Appraiser in concert.

If the appraisal order came from a lender it will be a guaranteed loan. If the appraisal order came from Rural Development it is either a direct loan, an interest credit subsidy recapture, or it could be a foreclosure. Knowing which of these types of assignments you have received is paramount to understanding the needs of Rural Development and their requirements of the appraisal.

Good luck and I would suggest a call to the State Appraiser. Chances could be pretty strong they will be seeing your work in a review.

 

[Integrity First]

Rural Development loans, both guaranteed and direct, are only available in towns of less than 20,000 residents. Business and Cooperative loans (ie commercial type loans) can be made in communities containing no more than 50,000 residents.

Should anyone have questions, each state has a chief appraiser, called a State Appraiser, that can be a good source of information for appraisal requirements and anything special a given State Appraiser might look for. Calling the State Rural Development office and asking for the appraiser is a great way to get your questions answered. States can set their own requirements and this is often done by the Rural Housing team and the State Appraiser in concert.

If the appraisal order came from a lender it will be a guaranteed loan. If the appraisal order came from Rural Development it is either a direct loan, an interest credit subsidy recapture, or it could be a foreclosure. Knowing which of these types of assignments you have received is paramount to understanding the needs of Rural Development and their requirements of the appraisal.

Good luck and I would suggest a call to the State Appraiser. Chances could be pretty strong they will be seeing your work in a review.

Good Advice. Contact information and more for each state can be found on each state's website. National website is www.rurdev.usda.gov
each state is the same with the addition of a forward slash and the 2 letter abbreviation for the state. Example: www.rurdev.usda.gov/ca

 

[Debra]

Thanks for the information! I used one of the links to call and talk to USDA about the needed repairs and Subject-to things on the property that I'm working on now...

 

[Roseann Dufala]

We had a speaker at a conference today who talked about USDA appraisals. She said that the cost approach must be form 1007? Does anyone know what form that is?

 

[Integrity First]

Form 1007 refers to the Marshall & Swift Square Foot Appraisal Form

 

[Cob]

We had a speaker at a conference today who talked about USDA appraisals. She said that the cost approach must be form 1007? Does anyone know what form that is?

I found this on the internet.


NOTE: Form 1007 ''Square Foot Appraisal Form'', is required only for proposed or existing property less than one year of age or when the estimated
market value of a property is based on the cost approach. The Marshall and Swift RE-2 Residential Cost program (electronically produced version)
may be used in lieu of Form 1007. A generic URAR may be used, including electronically produced versions. Guaranteed lender appraisals (GLA)
are not required to use Form RD 1922-8 (URAR) Forms Manual Insert Instructions. The appraisal should be logical and consistent throughout
whether the appraisal is for GRH or direct loans.

 

[Integrity First]

I found this on the internet.


NOTE: Form 1007 ''Square Foot Appraisal Form'', is required only for proposed or existing property less than one year of age or when the estimated
market value of a property is based on the cost approach. The Marshall and Swift RE-2 Residential Cost program (electronically produced version)
may be used in lieu of Form 1007. A generic URAR may be used, including electronically produced versions. Guaranteed lender appraisals (GLA)
are not required to use Form RD 1922-8 (URAR) Forms Manual Insert Instructions. The appraisal should be logical and consistent throughout
whether the appraisal is for GRH or direct loans.

"Form RD 1922-8 (URAR) is obsolete. USDA RD requires that the most recent version of the URAR is used. IF you use the Fannie Mae 1004 version of the URAR, then it must be completed in accordance with Fannie Mae Guidelines including definition of market value and intended users. If doing "disposition value" or "liquidation value" appraisal reports for lenders, then the report should be on a generic URAR as the Fannie Mae 1004 can not be properly used without violating Fannie Mae guidelines, particularly in terms of market value definition. For USD RD Guarantee and direct loans it is important that in addition to be logical and consistent, is that the description of the subject is accurate. One of the biggest problems today is that appraisers mislead the reader by not identifying the true condition of the property. "Average for a property of this age" just does not cut it.

 

[Cob]

Not sure if you read what I was answering back to the person, she said someone told here she needed to use the 1007 form (M&S) what I posted states that you only have to use it on a new construction or a home less than a year old. So if the Form RD-1922-8 is obsolete it doesn't really matter, because their statement clearly state that any generic URAR can be used.

The person I was responding to was told that a 1007 (M&S) had to be used, I was showing her something that clearly said it only had to be used on new construction homes or homes that were less than a year old.

 

[bosco8373]

I saw that someone mentioned the 'thermal requirements' we not required for a USDA. Does this mean you do not have to check the HVAC on a USDA inspection?

 

[PropertyEconomics]

HVAC inspection / check is required on USDA appraisals.