Documentation Appraiser Must Provide

For appraisals of individual condominium units, the documentation obligations extend to the project as a whole. The appraiser must report the appraisal on the Individual Condominium Unit Appraisal Report. In addition to analyzing and reporting on the specific unit, the appraiser is required to inspect the condominium project and provide project information data as an addendum to the appraisal report. This includes all data elements found in the Project Information Section of the standard condominium appraisal form. This ensures that the lender has sufficient information about the projects amenities and condition to assess the overall collateral risk.

When appraising manufactured housing, the report must include specific data verifying the units compliance with federal standards. The appraiser is required to report the HUD label number for all sections of the home. If the HUD Certification Label is missing or cannot be located, this must be explicitly reported. Additionally, the appraiser must report information found on the Data Plate, including the manufacturers name, the serial number, the model, and the date of manufacture. The report must also include the wind, roof load, and thermal zone maps indicated on the Data Plate to verify the home is suitable for its location.

For new construction appraisals, specific documentation must be provided to the appraiser and referenced in the report. The appraiser must obtain and analyze a fully executed Builders Certification of Plans, Specifications, and Site (Form HUD-92541), signed and dated no more than 30 days prior to the appraisal order. For properties that are 90 percent complete or less, the report relies on the review of the floor plan, plot plan, and exhibits to determine the size and level of finish. The appraiser must analyze these documents to ensure the projected value matches what is actually being built.

The appraiser plays a critical role in identifying flood hazards, and the report must contain findings from a review of the Federal Emergency Management Agency Flood Insurance Rate Map. The appraiser must make appropriate notations on the appraisal form regarding the flood zone. If the property appears to be located within a Special Flood Hazard Area, the appraiser is required to attach a copy of the flood map panel to the appraisal report. This documentation must identify the specific map panel number, the map date, and the FEMA zone designation to ensure the lender is aware of flood insurance requirements.

To support the market analysis, the appraiser must provide visual evidence of the comparable properties used to value the subject property. The report must include a front view photograph of each comparable sale, listing, or pending sale utilized in the Sales Comparison Approach. These photos verify that the comparables exist and appear as described in the data sources. While appraisers are expected to inspect the exterior of comparables from the street, they generally do not enter these properties. These photos help the underwriter confirm that the comparables selected are truly similar to the subject property in style, quality, and condition.

FHA appraisals require specific interior photographs to document the condition of the home properly. The report must include photos of the kitchen, the main living area, all bathrooms, and all bedrooms. In addition to these specific rooms, the appraiser must provide photos of any other rooms that represent the overall condition of the property. If there is a basement, photographs of that area are also required to verify its condition. Furthermore, if the property has undergone recent updates, such as restoration, remodeling, or renovation, the appraiser must include photographs that document these specific improvements to support the valuation.

The FHA has strict requirements regarding photographic documentation of the subject property’s exterior. The appraisal report must include clear photographs of the front and rear of the dwelling. Additionally, a street scene photograph is required to provide context for the property’s surroundings. If there are improvements with contributory value that are not captured in the front or rear photographs, such as a detached garage, barn, or patio, specific photos of these items must also be included. For proposed construction cases, the appraiser must provide a photograph that clearly shows the grade of the vacant lot where the home will be built.

A building sketch is a mandatory inclusion in the appraisal report and must display the Gross Living Area of the property along with all exterior dimensions of the house. Additionally, the sketch must depict patios, porches, decks, garages, breezeways, and any other attachments or outbuildings that contribute value to the property. The appraiser is also required to show the calculations used to arrive at the estimated Gross Living Area to ensure transparency regarding the home’s size. Furthermore, if the property exhibits functional obsolescence attributable to the floor plan design, an interior sketch or floor plan must be provided to illustrate the layout issues.

Yes, the appraisal report must include a legible street map that clearly shows the location of the subject property and each of the comparable properties used in the valuation analysis. This map must include comparable sales, rentals, listings, and any other data points utilized to support the value conclusion. It is essential that the map is readable and accurately places the subject in relation to the comparables. If there is a substantial distance between the subject property and the comparable properties, the appraiser is required to provide additional legible maps to ensure the context of the location is clear to the lender and FHA.

The FHA requires appraisers to use specific standardized forms based on the type of property being inspected to ensure consistency. For a standard single-family detached, attached, or semi-detached residential property, the appraiser must use the Uniform Residential Appraisal Report, known as Fannie Mae Form 1004 or Freddie Mac Form 70. If the property is an individual condominium unit, the required form is the Individual Condominium Unit Appraisal Report (Form 1073/465). For manufactured housing, the Manufactured Home Appraisal Report (Form 1004C/70B) is mandatory. Finally, for small residential income properties consisting of two to four units, the appraiser must utilize the Small Residential Income Property Appraisal Report (Form 1025/72).