USDA Appraisal

[Doug DeMars]

First USDA assignment.

From what I can gather, I treat this much like a FHA assignment. No worries there. A prior thread I read said something to the effect of also requiring comments regarding.

(Courtesy incognito)

a. Subject meets the thermal standards per RD instruction 1980-D. (document found RD AN no. 4364(1980-D) dated May 7, 2008)
b. Subject is (or isn't) served by public water source. (No big deal, if you read page 1 of the URAR it's already there.
c. (If applicable) Septic system appears to be sound and operable. Toilets were flushed.

Is there an additional item to complete called a "Existing Dwelling Certification" form? Never heard of that. Is this also required? If so, I have ACI and would appreciate someone telling me where in ACI I can specifically locate this...or at least what ACI calls this form.

Thanks.

 

[Lloyd Bonafide]

First USDA assignment.

Is there an additional item to complete called a "Existing Dwelling Certification" form? Never heard of that. Is this also required?

I don't think that is required today.

I have one client that usually orders FHA reports, but I have done a couple of USDA's for them recently, and I am not sure if this is a USDA requirement or just their requirement, but they ask for:

USDA appraisal assignments:
APPRAISER TO:
1.) VERIFY IF UTILITIES ARE ON PRIOR TO INSPECTION
2.) STATE THAT UTILITIES ARE ON AND WORKING AT TIME OF INSPECTION
3.) STATE IF PROPERTY MEETS HUD HANDBOOK REQUIREMENTS 4150.2 & 4905.1****

With the addition to the above, no FHA case number is required, but must state it is for the purposes of USDA.

Appraisers should be using a different scope of work for FHA reports, and just substitute USDA for FHA/HUD in that scope.

Otherwise, the report should be similar to an FHA report.

The USDA rural loan program is reportedly going to be out of funds within a few weeks, and is going to need more money from the government to keep this program going, but at the present time, 100% purchase money is available for borrowers and properties that qualify. There are several areas of suburban San Diego that qualify, and realtors report that over half of recent purchases in one area are 100% USDA loans, (so maybe that will be a source of REO work in coming years).

 

[Doug DeMars]

Thanks Lloyd-

My assignment is anything but in a "rural" area. Just happens to be in unincorporated Contra Costa County in the East Bay. Typical tract home on a 6K lot with a 3K house built in 2004. Its sub-market is surrounded by some agricultural land (largely protected by local "Urban Limit Line" mandates). By and large it's suburbia and "sprawl" at its finest. I'm sure this type of house is not what the USDA was thinking of when the program was developed. But I don't make the rules.

I doubt that future REO work will follow current market activity. The sale price is $290K for a 3K home. $96 a foot is very low for the region (not crazy low but low). If it's a similar pocket to what your referring to in SD county, then it was selling homes new for 300K in 2001 and for 800K during the peak...now back down to reality. Several investors are picking up these properties knowling full well their intrinsic value will eventually catch up to market value. You just can't build these things for what they're selling now.

 

[Lloyd Bonafide]

I doubt that future REO work will follow current market activity.

You're probably right, but anytime someone gets a 100% loan, (sometimes with cash back to the buyer at closing), there's always that possibility. :new_smile-l:

 

[Mr Rex]

USDA has eliminated the thermal requirements on existing housing.

 

[Mike Garrett RAA]

I had a appraiser who was doing USDA appraisals and I signed a few as supervisory appraiser. A cost approach was required and their cost data was totally different than ours. Spent about an hour on the phone with them but we got the job done.