Zoned Agricultural.

[Bertbrown]

FHA Reverse Mortgage. I have a property in Kansas on 24 Acres which is Zoned Agricultural and classified as a Farming / Ranch Operation with improvements. It is located in a suburban area and has one 10,000 sq.ft metal bldg with a few goats, chickens, roosters and horses which per home owner are for personal use only and not income producing. Per County the property has always been zoned agricultural. I have found comps in the area which are all zoned rural residential. So my question is being a Residential Appraiser can I perform an appraisal on this since property as it is zoned Agricultural?

 

[Howard Bouchard]

Yes, unless you determine it is an illegal use and then your client would probably want to cancel. Residential use may be a permitted use under current zoning (Read zoning description) or its current use could be a legal non-conforming use i.e. grandfathered, so call county and verify details and if property can be rebuilt to its current use. Your highest and best use analysis is where you should start however. You should also try to find a comparable residential sale with similar zoning if you proceed with a residential appraisal. FHA appraisals on rural properties are a lot different then an "in town" appraisals. So if you are not familar with the expanded inspection and reporting requirements you should probably find someone who is or decline this assignment.

 

[hastalavista]

So my question is being a Residential Appraiser can I perform an appraisal on this since property as it is zoned Agricultural?

That depends. The first thing I'd want to identify is the H&BU of the property. If the H&BU is residential, then you may be able to proceed.

But, Howard's comments are spot-on. I'm a residential appraiser and am FHA certified. Lately, I've been getting more rural-like appraisals for FHA. Those markets aren't necessarily the challenge, but the FHA guidelines regarding those types of non-urban/suburban properties are a challenge (since I do not routinely deal with them).
If you have someone who is very knowledgeable (like I do: Greg Boyd) that you can call on, that can make a big difference.
Everything is pretty much in the FHA handbook, but since you (or I) don't deal with those issues as a routine, it gets a little complicated for us city slickers!

Good luck!

 

[Bertbrown]

Thanks

Thanks for the feedback. My main issue is with the zoning and the lack of comparables with agricultural zoning. I would say its highest and best use would be residential since most of the area has been recently developed in the past four to five years. But with the current market and new construction at a hault in the area I think it would be difficult to make that case.

 

[Farmland]

Couple of points to consider - 1. Agricultual zoing usually does allow for housing but limits density, i.e. 1 house per 160 acres, etc. Check with the county. 2. HBU is most likely mixed. It sounds like it could be a HBU of 2 acres rural residental with the remander either ag prodution or recreational. HBU could also be a farmette or mini ranch for the enitre acreage. It all depends on the market. 3. The income produced by the current owner is not relevant to your appraisal, whether or not income would be produced by the typical buyer is more important. For example, the pasture (if there is one) may rent for $25 per acre but the owner useing it for himself or herself doesn't see it as a loss of $25 per acre.

The house and yard should be fairly typical to any house appraisal, it's the remaining acreage that may pose to be problematic to an appraiser without rural experience.

Best of luck to you.

 

[Ted Martin]

What county is it in?

 

[Mike Garrett RAA]

If the property is residential in nature, ie., not producing income from farming operations, then it will most likely qualify for an FHA loan. When in doubt, call the HOC.