SIRVA Mortgage Order Instructions Appraiser Trainees: This client does not permit Trainees to sign the appraisal report, however USPAP requirements apply when significant assistance has been provided by others Subject Section: The subject street address, city, state, and zip must be USPS Publication 28 compliant in accordance with UAD requirements. If the order information or physical address has conflicting information, include in addendum, and provide commentary. USPS address formatting and verification can be obtained at: https://tools.usps.com/go/ziplookupaction!input.action. The borrower name must match the order information. If this appraisal is for a purchase, then borrower and owner of public record name(s) must match purchase contract. Lender s name and address must appear on the appraisal report as identified in the Order Information section above. Please explain all Special Assessments. If the subject is a PUD, as defined by FNMA, the PUD section on page 3 should be completed as required. Please analyze the fully executed purchase contract, and all amendments prior to report submission. Include a comment stating the total number of pages in the analyzed purchase contract, as well as who provided the document. Do not submit the completed report prior to the review of the purchase contract. If you do not have a copy of the purchase contract, notify your Dwellworks contact. Neighborhood Description: If neighborhood is < 25% built up, the Appraiser must provide detailed commentary on current land use and growth rate In cases of declining, oversupplied markets, or > 6-month marketing times, the Appraiser must provide at least one additional comparable of a closed sale, active listing, or pending sale If the subject's appraised value differs significantly from the predominant housing price, provide detailed commentary on the effect this would have on marketability. If there is no impact, please indicate as well The neighborhood boundaries should be consistent with the location map, comparable selection and UAD guidelines Comparables from outside the defined neighborhood must be thoroughly explained. Any negative market conditions must be thoroughly explained, and any adverse effect on marketability must be addressed Absorption rate, inventory level information on page 2, and the 1004MC should be consistent with Housing Trends identified. If these are not consistent, provide commentary on any discrepancies If multiple parcels are indicated, follow current FNMA guidelines In declining markets, provide the reasons for the decline, the decline rate, and the data source Other Land Use must be explained, regardless of percentage.
Zoning/Site: FNMA guidelines should be followed The appraisal must include the actual size of the site and not a hypothetical portion of the site for the subject property If the property is zoned legal non-conforming (grandfathered use), the Appraiser is required to comment on whether the property can be rebuilt to its original footprint if damaged or destroyed, and provide verification source Any adverse effects that the non-conforming use has on the value and marketability must be reflected in the report If illegal zoning is discovered, OR if the subject s highest and best use is other than its current use, stop and contact Dwellworks. Be prepared to discuss specific zoning classification(s) and uses If the subject is in a flood zone, then like comparables are recommended. If none are available, the Appraiser must provide detailed commentary explaining any impact on marketability If the property is subject to certain land-use regulations, such as coastal tideland or wetland laws, that create setback lines or other provisions that prevent the reconstruction or maintenance of the property improvements if they are damaged or destroyed, please stop, and contact Dwellworks The appraiser must consider the present or anticipated use of any adjoining property that may adversely affect the value or marketability of the subject property In accordance with USPAP, appraiser must summarize Highest and Best Use, including support and rationale for the opinion Utilities: The Appraiser must address if the utilities of the property meet community standards. If public sewer and/or water facilities, those that are supplied and regulated by the local government, are not available, community or private well and septic facilities must be available and utilized by the subject property. The owners of the subject property must have the right to access those facilities, which must be viable on an ongoing basis. Private well or septic facilities must be located on the subject site, unless the subject property has the right to access off-site private facilities and there is an adequate, legally binding agreement for access and maintenance. If there is market resistance to an area because of environmental hazards or any other conditions that affect well, septic, or public water facilities, the appraisal must address the effect of the hazards on the value and marketability of the subject property. Appraiser must provide commentary in the appraisal report as to whether the utilities were on and functioning at the time of inspection. Improvements: If there is market resistance to a property because its improvements are not compatible with the neighborhood (age, type, design, and construction materials) or with the requirements of the competitive market because of adequacy of plumbing, heating, or electrical services; design, quality; size; condition; or any other reason directly related to market demand, the appraiser must address the impact to the value and marketability of the subject property. Only above-grade areas can be included in the calculation of the gross living area for a one-unit property or a unit in a condominium or PUD project. Basements and other partially below-grade
areas must be considered separately and the appraisal adjusted accordingly. If this is not the case, the reasons should be thoroughly explained. The subject should generally conform to the neighborhood in terms of style, design, utility, etc. If this is not the case, please provide detailed commentary. If subject condition is as a C6, the report is to be completed subject to all repairs necessary for a C5 condition rating or better. Repairs should be listed with a cost to cure and corresponding photographs. If the subject's effective age and actual age differ considerably, year built adjustments, and/or if the property has an effective age higher than its actual age, the Appraiser must provide detailed commentary regarding all improvements, significant updating, or renovations. Any evidence of dampness, settlement, or infestation must be thoroughly explained with photographic evidence. If the property has been identified in the Appraiser s commentary as being in fair or poor condition, the Appraiser must thoroughly explain and provide comparables that offer similar condition. Any deficiencies or adverse conditions should be thoroughly explained, and any needed repairs reported with a cost to cure provided. Photos of the needed repairs should also be included in the report. Any adverse environmental conditions must be thoroughly explained. Subject details must be consistent with the sketch and sales grid. If the subject property does not have a permanent heating system, please provide detailed comments in the report about whether it is common for the area and the impact on marketability The subject must have a working kitchen, and at least one working bath. If the subject property has an unusual layout and/or floor plans provide detail commentary within the report regarding market resistance to the property and make appropriate adjustments to reflect the situation in the overall analysis. FNMA guidelines regarding Gross Living Area (GLA) should be followed. The appraiser must be consistent when her or she calculates and reports the finished above-grade room count and the square feet of gross living area that is above-grade. The need for consistency also applied from report to report. Detailed commentary is required if the subject is over or under improved. Accessory Units Fannie Mae will purchase a one-unit property with an accessory dwelling unit. An accessory dwelling unit is defined as any area, above grade or below, attached or detached and having a fully functioning kitchen and bathroom. Some examples may include a living area over a garage and basement units. Whether a property is a one-unit property with an accessory unit or a two-unit property will be based on the characteristics of the property, which may include, but are not limited to, the existence of separate utilities, a unique postal address, and whether the unit is rented. The appraiser is required to provide a description of the accessory unit, and analyze any effect it has on the value or marketability of the subject property. Accessory Dwelling Units (ADU); Appraiser must confirm that any ADUs o Improvements Section General Description to reflect One with Accessory Unit. o Are permitted under zoning,
o Can be rented out under current zoning, o Are separately metered and comment on any marketability issues o Has a separate entrance o Has a separate address If ADU is permissible, then 1 additional comp with similar influence is required. If it is determined that the property contains an accessory dwelling unit that does not comply with zoning, the property is eligible under the following additional conditions: o The use conforms to the subject neighborhood and to the market. o The property is appraised based upon its current use. o The appraisal must report that the improvements represent a use that does not comply with zoning. o The appraisal report must demonstrate that the improvements are typical for the market through an analysis of at least three comparable properties that have the same non-compliant zoning use. If there is only a second kitchen in the property, but no accessory apartment, any functional obsolescence must be properly identified and addressed in the commentary. An additional comparable with a second kitchen is not necessary. Sales Comparison Analysis (SCA): All comparables must be similar in physical and legal characteristics when compared to the subject property. These characteristics include, but are not limited to, site, room count, gross living area, style, and condition. Comparables should be competitive and appeal to the same market participants that would also consider purchasing the subject property. Comparables that are significantly different from the subject property may be acceptable; however, the appraisal must describe the differences, consider these factors in the market value, and provide an explanation justifying the use of the comparables, If the property is urban or suburban, the appraiser is responsible for determining which comparables are the best and most appropriate for the assignment If the subject property is in a condominium or PUD project all FNMA guidelines for comparables must be followed. See additional condominium requirements under All Condominiums section. If the property is rural appraiser must use his or her knowledge of the area and apply good judgment in selecting comparable sales that are the best indicators of value. A detailed explanation of the comparables used is required. The ideal age for comparables is less than 1 year from sale date however the best and most appropriate comparable sales may not always be the most recent sales. If comparables used are over 1 year in age a detailed explanation of the comparable used is required All data sources must be publicly verifiable and disclosed in the report. Days on market for all comparables, listings, or pending sales must be provided. Comparables used should be from a verifiable source where the interior condition and the terms of sale can be confirmed by a third party. The Appraiser must analyze the market for competitive properties and provide appropriate market based adjustments Across the board adjustments that affect the opinion of value must be properly supported with additional closed sales to support and bracket the subject s characteristics.
All prior sale information for the subject and comparables should be provided, along with the data sources used for verification. Appraiser must provide adequate commentary explaining his/her analysis, methodologies, and conclusions. The indicated value is to be supported by both the pre- and post- adjusted range of the comparables, and should appear reasonable. Reconciliation: The appraisal should be correctly conditioned, as is, subject to, etc. The assignment should be completed subject to for any of the following: New construction not yet complete Any renovations on existing construction C6 condition (or below average on a 1025) - If the Appraiser s commentary indicates the subject condition is anything less than average, then the subject must be appraised subject to with a cost-to-cure to bring the subject C5 or better (average condition on a 1025) All utilities not being on and operational Any deficiency that affects safety, livability, soundness, or structural integrity If access was denied to any rooms or of permission to photograph any areas was denied Cost Approach / Income Approach: Cost Approach is only required when the subject is a unique property or has specialized improvements If the Cost Approach is not used, the Appraiser should comment as to why it was not completed. If the appraiser has reported the cost or income approach, the data sources and methodologies used should be clearly defined. If the appraiser opts to add an opinion of site value, and that opinion exceeds 30% of the appraised value then, comments are needed as to whether site value is typical to the market Solar Panels: If the subject property has solar panels, the appraiser must indicate if the solar panels are leased or owned by the property owner. If the property owner is the owner of the solar panels, standard eligibility requirements apply If the solar panels are leased, they may not be included in the appraised value of the property Appraiser must comment whether the subject is also connected to public power Subject Photos: All photographs must be clear, appropriately identified, and must plainly show the completed improvements. They must be high quality electronic images, in focus, with proper lighting. Interior photos with applicable labels are required and at minimum include: all kitchen(s) o all bathrooms above and below grade o main living area(s)
o any deferred maintenance or repair items, recent updates, restoration, remodeling, and renovations Exterior Photos with applicable labels are required with all appraisals. o front, back, and a street scene of the subject property o o all outbuildings, even if they do not contribute value. any deferred maintenance or repair items, recent updates, restoration, remodeling, and renovations Please include commentary on any positive or negative conditions or improvements that have a material effect on the market value or marketability of the subject property Note that Fair Housing laws apply to any photographs contained in the appraisal If you are unable to obtain photos of certain rooms or buildings, please note within the report why you were not able to obtain the photos and consult with your AMC as applicable Attachments: The 1004 MC addendum must accompany the completed appraisal report for all 1-4 unit dwellings All supplemental addendums referenced in the report. All reports must include a current copy of the Appraiser s license with all reports. Only enter the Appraiser license or certification number in the appropriate field on the signature page. Do not enter this information into both fields; only choose the field that applies to the licensing type. Do not include more than one license number. Do not use special characters other than license number A location map showing the subject and all comparables, including all listings and rental comparables, must be provided and is consistent with the neighborhood description A sketch with dimensions, room labels, and GLA for all above grade or partially above grade finished areas with calculations must be provided California properties: The following is needed on all properties in California: Comment on whether a carbon monoxide detector was present on the property at the time of inspection Comment on whether the hot water heater was double strapped at the time of inspection. The presence or absence of these items will not affect the appraisal s reconciliation of as is verses subject to All Condominiums: Follow all FNMA guidelines for comparable selection. This includes new or recently converted complexes or detached condos In the event, there are no closed sales inside the new subject property or subdivision because the subject property transaction is one of the first units to sell, the appraiser may use two pending sales in the subject project or subdivision in lieu of one closed sale. When the appraiser is using two pending comparable sales in lieu of a closed sale, the appraiser must also use at least three
closed comparable sales from projects or subdivisions outside of the subject property s project or subdivision. When the address of the property does not include a Unit #, please add a dash (- ) in the Unit # field of the appraisal report o Example Condominium Address: 123 Main Street o Correct Appraisal Address Information o Appraisal Property Address - 123 Main Street o Appraisal Unit # - Incorrect Appraisal Address Information o Appraisal Property Address 123 Main Street, Unit # - 123 Detached / Site Condos: The FNMA 1073 form must be used Indicate that the subject property is a detached condominium The name of the Homeowner s Association, property management group or builder (as applicable) Name and phone number of the contact person used to verify project information; and The PUD box is left blank Indicate the monthly HOA fee and what it covers Total number of units in the project Total current number of units completed Total number of units sold Whether any single entity owns more than 10% of the units in the project; and A description of what the projects common areas are If any of the common elements (as applicable) are leased to or by the HOA Commentary regarding the adequacy of the projects overall maintenance Commentary regarding the effect that buyer resistance to the condominium form of ownership has on the market value of the individual unit If the condominium project is new and the condominium unit is offered by a builder other than the one that built the subject unit than at least one detached condo unit (which may be located either in a competing project or in the subject project) is required Whether the HOA or developer is named as a party to pending litigation that relates to the safety, structural soundness, habitability, or functional use of the project Whether if in a new project, the seller is offering excessive or undisclosed sale/financing structures to the buyer. If the condominium project is new, the appraiser used as a comparable sale at least one detached condo unit, which may be located either in a competing project or in the subject project, if the condo unit is offered by a builder other than the one that built the subject unit. PUD Properties: For all PUD properties, the appraiser must list and comment on the following and how they compare to area PUD developments:
The common elements and amenities are minimal, do not impact marketability AND are typical / common to the area and the comparables have similar common elements / amenities. Examples include Greenbelt, Signage, Garbage Pick-Up, Hiking Trails or Basic Maintenance -OR- Comparables have the same amenities, such as (Security gate, Community Pool, etc.) -OR- Are not standard or typical for the area and/or comparables do not have similar common element/amenities. The appraiser MUST define impact to marketability and adjust value accordingly if necessary. The PUD section must be completed regardless of builder / developer control or whether attached or detached. 2-4 Family Reports: FHA: Comparable photos and location map are to include comparable rentals Appraiser must reconcile all Value Per indicators of value in the summary of Sales Comparison Approach All current 4000.1 guidelines apply. The FHA case number must appear in the upper right corner of each page of the appraisal form, and be above the file number The case number must be formatted correctly XXX-XXXXXXX and not include any designator number such as 703 at the end. This designator number may come over with the order, however, is not part of the case number Appraiser Trainees may not sign the appraisal report, only the FHA roster approved appraiser who was assigned the order 1004D Final Inspection and Appraisal Update: Final inspections must contain subject photos including finished work or repair items cited in the original appraisal All Updates must include the Effective Date of Appraisal Update