FEE APPRAISER TRAINING GUIDE

FOR THE

**HOUSTON REGIONAL LOAN CENTER**

# REVISED 1/2005

![](media/image1.png){width="6.357638888888889in"
height="4.164583333333334in"}

**DEPARTMENT OF VETERANS AFFAIRS**

**HOUSTON, TEXAS**

**DEPARTMENT OF VETERANS AFFAIRS**

**REGIONAL LOAN CENTER**

**C&V - (263), 6900 Almeda Road, Houston, Texas 77030**

**VETERANS:** ASSISTANCE (NATIONWIDE) (800) 827-1000

**WEBSITES:**

VA APPRAISAL ASSIGNMENTS & E-APPRAISAL <http://vip.vba.va.gov/>

LENDERS HANDBOOK VA PAMPHLET 26-7
<http://www.warms.vba.va.gov/pam26_7.html>

HOUSTON REGIONAL LOAN CENTER
[http://www.vba.va.gov/ro/houston/lgy/home.html](http://www.vba.va.gov/houstonrlc.htm)

VA FORMS <http://www.vba.va.gov/pubs/homeloanforms.htm>

HOUSTON CONSTRUCTION & VALUATION EMAIL ADDRESS **lgyhurar@vba.va.gov**

**HOUSTON REGIONAL LOAN CENTER MAIN PHONE: (888) 232-2571 x3117**

**Construction and Valuation FAX: (713) 794-3813**

> **CONSTRUCTION AND VALUATION STAFF-HOUSTON**

William D. Newton Email: <lgydnewt@vba.va.gov> ext 3117

Tom Braggs Email: <lgytbrag@vba.va.gov> ext 3004

George T. King Email:
[lgygking2@vba.va.gov](mailto:lgygtking@vba.va.gov) ext 3121

Greg Dearman Email: <lgygdear@vba.va.gov> ext 3113

Richard Kobus Email: <lgyrkobu@vba.va.gov> ext 3114

Gil Rodrick Email: <lgygrodr@vba.va.gov> ext 3116

Don Collier Email: <lgydcoll@vba.va.gov> ext 4166

Janice Boone Email: <lgyjboon@vba.va.gov> ext 3219

Janice Hamacher Email: <lgyjhama@vba.va.gov> ext 3117

Ellen Mangum Email: <lgyemang@vba.va.gov> ext 3607

Laddie Petru Email: <lgylpetr@vba.va.gov> ext 3115

Field personnel for the out-based offices are as follows:

LITTLE ROCK, ARKANSAS

VA Regional Office (350) 2200 Ft. Roots Dr, Bldg 65 N. Little Rock, AR
72114

ED GREATHOUSE PH#: 501-370-3768 FAX#: 501-370-3892

e-mail address: vavbalit/ro/lgycv@vba.va.gov

MUSKOGEE, OKLAHOMA

VA Regional Office 125 S. Main Street Muskogee, OK 74401

DONNIE GUINN PH#: 918-781-7521 FAX#: 918-781-7524

e-mail address: <mus/lgyapr@vba.va.gov>

LOREN LEAVELL PH# 918-781-7525

e-mail address <mus/lgyapr@vba.va.gov>

NEW ORLEANS, LOUISIANA

VA Regional Office 701 Loyola Avenue New Orleans, LA 70113

JIM JOHNSON PH#: 504-619-4381 FAX#: 504-589-3726

LISA PUMILIA PH#: 504-619-4382

e-mail address: vavbanol/lgyapr@vba.va.gov

SAN ANTONIO, TEXAS

VA Regional Office 5788 Eckhert Road San Antonio, TX 78240

FAX#: 210-699-2382

DON NEWBERRY PH#: 210-699-2314

e-mail address: lgsdnewb@vba.va.gov

WACO, TEXAS

VA Regional Office 1 Veterans Plaza, 701 Clay Avenue Waco, TX 76799

STEVE GREGORY PH#: 254-299-9637 FAX#: 254-299-9663

JERRY HIGGINBOTHAM PH#: 254-299-9631

DIANE ROGERS PH#: 254-299-9693

e-mail address: <wacrocav@vba.va.gov>

[Additional Out-Based Staff]{.underline}:

PATRICIA SELBY PH# 254-666-2352 <tselbyva@hot.rr.com>

JAN SHELNUT PH# 501-794-2525 [jashel1953@msn.com]{.underline}

**TABLE OF CONTENTS**

+-------------------------------------------------------------+--------+
|                                                             | **     |
|                                                             | PAGE** |
+-------------------------------------------------------------+--------+
| **SPECIFIC REQUIREMENTS**                                   | 8      |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| SECTION A: GENERAL TOPICS                                   | 10     |
+-------------------------------------------------------------+--------+
| A1. GENERAL INFORMATION **. . . . . . .**                   | 10     |
+-------------------------------------------------------------+--------+
| 1\. Availability of the Appraiser                           |        |
+-------------------------------------------------------------+--------+
| 2\. Appraisal Assignment Process                            |        |
+-------------------------------------------------------------+--------+
| 3\. Fax of Assignment Information                           |        |
+-------------------------------------------------------------+--------+
| 4\. Timeliness of Reports                                   |        |
+-------------------------------------------------------------+--------+
| 5\. Appraisal Report Forms Used                             |        |
+-------------------------------------------------------------+--------+
| 6\. Fees, Expenses and Collection Problems                  |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| A2. APPRAISER CONDUCT and ASSOCIATE APPRAISERS **. .**      | 17     |
+-------------------------------------------------------------+--------+
| 1\. Conduct and Integrity                                   |        |
+-------------------------------------------------------------+--------+
| 2\. Certifications Regarding Conduct                        |        |
+-------------------------------------------------------------+--------+
| 3\. VA Policy Regarding Conflicts of Interest               |        |
+-------------------------------------------------------------+--------+
| 4\. Use of Associate Appraisers                             |        |
+-------------------------------------------------------------+--------+
| 5\. Divulging Information from the Appraisal Report         |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| A3. ELIGIBLE PROPERTIES - TYPES **. . . .**                 | 19     |
+-------------------------------------------------------------+--------+
| 1\. Existing Construction                                   |        |
+-------------------------------------------------------------+--------+
| 2\. New Construction                                        |        |
+-------------------------------------------------------------+--------+
| 3\. Proposed Construction                                   |        |
+-------------------------------------------------------------+--------+
| 4\. PUD's and Condominiums                                  |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| A4. VA MINIMUM PROPERTY REQUIREMENTS (MPR\'S) **. . .**     | 20     |
+-------------------------------------------------------------+--------+
| 1\. Property Constraints and Perspective                    |        |
+-------------------------------------------------------------+--------+
| 2\. MPR's for Existing and New Construction                 |        |
|                                                             |        |
| a\. Property Access                                         |        |
|                                                             |        |
| b\. Property Characteristics                                |        |
|                                                             |        |
| c\. Defective Conditions                                    |        |
|                                                             |        |
| d\. Other Hazards                                           |        |
|                                                             |        |
| 3\. MPR's for Proposed Construction                         |        |
|                                                             |        |
| a\. Building Codes                                          |        |
|                                                             |        |
| b\. Federal Regulations                                     |        |
|                                                             |        |
| c\. HUD Guidelines                                          |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| A5. LENDER APPRAISAL PROCESSING PROGRAM (LAPP) **. . .**    | 24     |
+-------------------------------------------------------------+--------+
| 1\. The LAPP Program                                        |        |
+-------------------------------------------------------------+--------+
| 2\. Eligible Properties Under LAPP                          |        |
+-------------------------------------------------------------+--------+
| 3\. Appraiser/Lender Cooperation                            |        |
+-------------------------------------------------------------+--------+
| 4\. Change of Value under LAPP                              |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| A6. SERVICER\'S LOSS MITIGATION PROGRAM (SLMP) **. . .**    | 25     |
+-------------------------------------------------------------+--------+
| 1\. SLMP and the Servicer's Role                            |        |
+-------------------------------------------------------------+--------+
| 2\. Appraisal Requests                                      |        |
+-------------------------------------------------------------+--------+
| 3\. Appraisal Procedures                                    |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| A7. VA PORTFOLIO LOANS                                      | 26     |
+-------------------------------------------------------------+--------+
| 1\. VA is the Lender                                        |        |
+-------------------------------------------------------------+--------+
| 2\. Appraisal Requests                                      |        |
+-------------------------------------------------------------+--------+
| 3\. Appraisal Procedures                                    |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| **SECTION B: APPRAISAL AND INSPECTION REPORTS**             | 27     |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| B1. GENERAL APPRAISAL STANDARDS **. . . . . .**             | 27     |
+-------------------------------------------------------------+--------+
| 1\. Definition of Value                                     |        |
+-------------------------------------------------------------+--------+
| 2\. VA Appraisal Standards                                  |        |
+-------------------------------------------------------------+--------+
| 3\. Use of Appraisal Software                               |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| B2. GETTING AN ASSIGNMENT . . . . . . .                     | 27     |
+-------------------------------------------------------------+--------+
| 1\. Origination Requests                                    |        |
+-------------------------------------------------------------+--------+
| 2\. Liquidation Requests                                    |        |
+-------------------------------------------------------------+--------+
| 3\. Inspection Requests                                     |        |
+-------------------------------------------------------------+--------+
| 4\. Cancellation Policies                                   |        |
+-------------------------------------------------------------+--------+
| B3. PREPARING AN APPRAISAL REPORT . . . . .                 | 30     |
+-------------------------------------------------------------+--------+
| 1\. File Number (VA Case Number)                            |        |
+-------------------------------------------------------------+--------+
| 2\. Neighborhood Section                                    |        |
+-------------------------------------------------------------+--------+
| 3\. Market Conditions Section                               |        |
+-------------------------------------------------------------+--------+
| 4\. Site Section                                            |        |
+-------------------------------------------------------------+--------+
| 5\. Cost Approach Section                                   |        |
+-------------------------------------------------------------+--------+
| 6\. Sales Comparison Analysis Section                       |        |
+-------------------------------------------------------------+--------+
| 7\. Reconciliation Section                                  |        |
+-------------------------------------------------------------+--------+
| 8\. Signature and Date of Receipt                           |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| B4. REPORTING MPR REQUIREMENTS . . . . . .                  | 34     |
+-------------------------------------------------------------+--------+
| 1\. Overview                                                |        |
+-------------------------------------------------------------+--------+
| 2\. Reporting MPR Items                                     |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| B5. REPORTING DEFECTIVE MPR PAINT REPAIRS . . . .           | 35     |
+-------------------------------------------------------------+--------+
| 1\. Definitions                                             |        |
+-------------------------------------------------------------+--------+
| 2\. Repair of Defective Paint                               |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| B6. APPRAISAL REPORT EXHIBITS and COPIES **. . . .**        | 36     |
+-------------------------------------------------------------+--------+
| 1\. Photographs                                             |        |
+-------------------------------------------------------------+--------+
| 2\. Location Map(s)                                         |        |
+-------------------------------------------------------------+--------+
| 3\. Improvements Sketch                                     |        |
+-------------------------------------------------------------+--------+
| 4\. Certification Statement                                 |        |
+-------------------------------------------------------------+--------+
| 5\. Appraisal Request Form                                  |        |
+-------------------------------------------------------------+--------+
| 6\. Number of Copies                                        |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| B7. PREPARING A REPAIR INSPECTION REPORT **. . . . .**      | 37     |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| B8. SENDING THE APPRAISAL OR INSPECTION REPORT **. . . .**  | 37     |
+-------------------------------------------------------------+--------+
| 1\. Origination Reports                                     |        |
+-------------------------------------------------------------+--------+
| 2\. Liquidation Reports                                     |        |
+-------------------------------------------------------------+--------+
| 3\. Inspection Reports                                      |        |
+-------------------------------------------------------------+--------+
| 4\. EDI Transmittal of Reports                              |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| B9. REVIEW OF THE APPRAISAL REPORT **. . . . .**            | 39     |
+-------------------------------------------------------------+--------+
| 1\. Origination Reports                                     |        |
+-------------------------------------------------------------+--------+
| 2\. Liquidation Reports                                     |        |
+-------------------------------------------------------------+--------+
| 3\. Additional Information                                  |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| B10. BILL FOR THE APPRAISAL OR INSPECTION FEE **. . .**     | 40     |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| B11. APPEALS (RECONSIDERATIONS OF VALUE) **. . . .**        | 40     |
+-------------------------------------------------------------+--------+
| 1\. Who May Appeal                                          |        |
+-------------------------------------------------------------+--------+
| 2\. Role of the Appraiser                                   |        |
+-------------------------------------------------------------+--------+
| 3\. Timeliness                                              |        |
+-------------------------------------------------------------+--------+
| 4\. Additional Fees                                         |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| **SECTION C: SPECIAL APPRAISAL PROBLEMS**                   | 41     |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| C1. CONDOMINIUMS **. . . . . . . .**                        | 41     |
+-------------------------------------------------------------+--------+
| 1\. Appraisal Request Information                           |        |
+-------------------------------------------------------------+--------+
| 2\. Appraisal Requirements                                  |        |
+-------------------------------------------------------------+--------+
| 3\. Comparable Sales                                        |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| C2. INCOME PROPERTIES (2-4 UNITS) **. . . . . .**           | 42     |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| C3. PROPOSED CONSTRUCTION (SINGLE) **. . . . .**            | 43     |
+-------------------------------------------------------------+--------+
| 1\. The Appraisal Request                                   |        |
+-------------------------------------------------------------+--------+
| 2\. Using the Plans                                         |        |
+-------------------------------------------------------------+--------+
| 3\. Additional Certification                                |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| C4. LIQUIDATION/DEFAULT CASES **. . . . . .**               | 44     |
+-------------------------------------------------------------+--------+
| 1\. Inspecting Occupied Properties                          |        |
+-------------------------------------------------------------+--------+
| 2\. Inspecting Vacant Properties                            |        |
+-------------------------------------------------------------+--------+
| 3\. Special Interior Inspection Cases                       |        |
+-------------------------------------------------------------+--------+
| 4\. Appraisal Requirements                                  |        |
+-------------------------------------------------------------+--------+
| 5\. Addendum Information                                    |        |
+-------------------------------------------------------------+--------+
| 6\. The Departure Provision                                 |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| C5. MANUFACTURED (MOBILE) HOMES **. . . . . .**             | 48     |
+-------------------------------------------------------------+--------+
| 1\. Eligibility of the Property                             |        |
+-------------------------------------------------------------+--------+
| 2\. Existing M.H. Construction                              |        |
+-------------------------------------------------------------+--------+
| 3\. Proposed M.H. Construction                              |        |
+-------------------------------------------------------------+--------+
| 4\. Appraisal Analysis                                      |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| C6. SPECIAL PROPERTY PROBLEMS **. . . . . .**               | 49     |
+-------------------------------------------------------------+--------+
| 1\. Airports                                                |        |
+-------------------------------------------------------------+--------+
| 2\. Appliances and Other Removable Equipment                |        |
+-------------------------------------------------------------+--------+
| 3\. Coastal Barrier Resources System (CBRS)                 |        |
+-------------------------------------------------------------+--------+
| 4\. Commercial/Residential Combinations                     |        |
+-------------------------------------------------------------+--------+
| 5\. Common/Party Walls and Zero Lot Lines                   |        |
+-------------------------------------------------------------+--------+
| 6\. Contract Repairs                                        |        |
+-------------------------------------------------------------+--------+
| 7\. Excess Land                                             |        |
+-------------------------------------------------------------+--------+
| 8\. Farm Property                                           |        |
+-------------------------------------------------------------+--------+
| 9\. Flood Zones                                             |        |
+-------------------------------------------------------------+--------+
| 10\. Fluctuating Markets (Construction Costs)               |        |
+-------------------------------------------------------------+--------+
| 11\. High Pressure Gas/Liquid Petroleum Lines               |        |
|                                                             |        |
| and High Voltage Electric Lines                             |        |
+-------------------------------------------------------------+--------+
| 12\. Partial Releases                                       |        |
+-------------------------------------------------------------+--------+
| 13\. Renovations and Remodeling                             |        |
+-------------------------------------------------------------+--------+
| 14\. Unvented Space Heaters and Fireplaces                  |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| **SECTION D: MASTER COMMITTEE APPRAISALS (MCRV'S)**         | 53     |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| 1\. WHAT IS A MASTER COMMITTEE APPRAISAL                    |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| 2\. THE APPRAISAL ASSIGNMENT                                |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| 3\. EXHIBITS USED                                           |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| 4\. REVIEWING THE PLAN SETS AND FIELD WORK                  |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| 5\. ESTABLISHING THE VALUES                                 |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| 6\. THE NARRATIVE SUPPLEMENT                                |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| 7\. CONDOMINIUM CONVERSION PROJECTS                         |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| 8\. THE COMPLETED MASTER REPORT                             |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| 9\. VALUE APPEALS                                           |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| 10\. CONSTRUCTION INSPECTIONS                               |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| 11\. THE APPRAISAL FEE                                      |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| SECTION E. ADDITIONAL INFORMATION AND ADDENDUMS             | 58     |
+-------------------------------------------------------------+--------+
| QUALITY RECOMENDATIONS                                      | 58     |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| ABBREVIATIONS                                               | 61     |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
| ADDENDUM EXAMPLES                                           | 63     |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+
|                                                             |        |
+-------------------------------------------------------------+--------+

**SPECIFIC REQUIREMENTS**

Fee appraisers are expected to conduct themselves in a diplomatic and
professional

manner at all times. Negative personal opinions regarding condition,
location, style,

marketability, etc. are not to be conveyed to any party during or after
the appraisal

process. A professional appearance and demeanor are required at all
times.

You are not required to discuss the appraisal report with any party
other than the

LAPP underwriter or the VA staff appraiser. However, you may and are
encouraged

to do so in order to maintain an effective rapport. Serious
disagreements should be

referred to VA.

Do not submit invoices prior to completion and mailing of the appraisal
report.

Fee appraisers are required to **personally** inspect the interior and
exterior of the

subject property and the exterior of all comparable sales employed. This
cannot be

delegated to an associate, and **violations of your certification in
this regard are**

**considered grounds for removal from the VA panel**. We are also
required to notify

licensing agencies of such violations, so please be very careful in this
area.

Generally, the "sales comparison approach" will be used to estimate the
market

value of the subject property. Comparables should be closed, arms length
transactions which have occurred as recently as possible in the
competitive marketing

area (subdivision if possible).

Do not require roofing, heating, plumbing or electrical certifications.
If there is any question as to the condition of these systems, state the
reason. We will determine the specific requirements based on your
comments.

When asked to perform a repair inspection, the report should be typed on
your letterhead. **Do not use VA form 26-1839 (Compliance Inspection
Report).**

You are not expected to enter attics or crawl spaces. However, you
should look inside each for evidence of fire damage, moisture,
insulation, structural problems or roof leaks.

Phone calls received from VA staff should be returned ASAP. Calls from
LAPP

underwriters should be returned within 24 hours of receipt.

Properties should be appraised to meet Minimum Property Requirements.

VA recognizes three categories of appraisals:

-   Existing- any home that has been fully completed for more than 12
    months or more.

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-   New- a newly constructed home that is fully complete, or complete
    except for customer preference items.

-   Proposed- appraisal is based upon plans and specifications
    regardless of

the stage of construction/completion (if less than fully complete). Plan
and

specs must be certified, or include HUD Form 92541, or will be returned.

(NOTE: THE APPRAISAL REQUEST IS TO BE PROCESSED AS ORDERED BY THE
LENDER. MATCH THE APPRAISAL TO THE REQUEST WHEN POSSIBLE. IF THE
APPRAISAL IS ORDERED AS "PROPOSED" DO **[NOT]{.underline}** CHANGE TO
EXISTING IF THE PROPERTY IS NEAR COMPLETION, THE TYPE OF PROCESSING
AFFECTS THE VETERAN DIRECTLY.)

If there is any doubt about what type of appraisal you are to perform,
ASK THE LENDER!

All appraisals must be completed as quickly as conventional appraisals
within your

geographic area, [no]{.underline} later than 7 calendar days from
receipt of 1805. See detailed instructions in Section A1, paragraph 4.

PHOTOGRAPHS:

Subject - photos of dwelling front, rear, other significant improvements
and street

Comparables- photo of front

LISTINGS - MLS or better

Please provide additional photos of any influence or feature which
significantly affects value (waterfront site, pool, or other
improvements contributing \$3,000 or more).

Show date the assignment was received and the date the report was
submitted in the upper right hand corner of page two of the URAR.

Large adjustments( over \$2500 ) for condition, view, location, site,
quality and extras must be fully explained.

The VA trend statement will be placed on the front page of the URAR in
the

"Neighborhood" section.

All liquidation appraisals must use the VA addendum format as shown in
Addenda 1

and 2.

Pools: Describe in detail (length, width, wading or diving) with
description of any surrounding deck, concrete apron cabana etc.

**Comparable sales data provided by real estate sales personnel or
others associated with the transaction should be accepted gratefully and
considered**. You are not required to utilize this data if you conclude
that it is not representative for comparison to the subject property,
but you are required to accept the data nicely. This is particularly
true with new or proposed construction when the best comparable sales
data is sometimes not usable as recorded. **The builder should be
contacted and invited to provide sales data**, which must be accompanied
by a copy of the HUD-1 and sales contract with all relevant change
orders and addenda. Also, **do not ever fail to reconsider a valuation
upon request, maintaining a professional demeanor and an open mind!!!
Customer service to veterans is essential to VA.**

**SECTION A: GENERAL TOPICS**

***A1***. **GENERAL INFORMATION**

**1. APPRAISER AVAILABILITY**

VA fee appraisers must be available during normal business hours and
return all calls within 24 hours. VA must have on file both your office
and cell phone telephone numbers. Notify us promptly by phone and
follow-up by email any time you are unavailable due to illness,
vacations, or other obligations. Also, notify this office immediately
should your street address, fax, email address or office and cell phone
telephone numbers change.

If you desire inactive status for a period exceeding 90 days (except
health-related), your return to active status will be reviewed in light
of current assignment needs.

**2. APPRAISAL ASSIGNMENT PROCESS**

We are responsible for appraisal assignments, reassignments, appraiser
territories and related matters. Assignments are provided on a rotating
basis from a roster of Fee Appraisers who have been selected and
approved by us. The number of assignments given to you is governed by
your ability to complete reports within VA timeliness standards, by the
overall quality of the reports submitted, and by the needs of the
marketplace.

All assignments are generated by computer, using programming which
maintains the rotation and your area(s) of coverage for us. *Call us to
reassign any cases where you have a conflict of interest.*

All VA cases are assigned a VA Case Number ("LH number"), whether or not
an appraiser is assigned. The case number/LH number must be included in
your appraisal report and all other related correspondence.

**3. FAX and E-MAIL ASSIGNMENT INFORMATION**

VA Form 26-1805-1 can be mailed, faxed or e-mailed to the appraiser. It
is **no longer necessary that this form be signed**, but the name of the
person authorizing the request should be annotated.

4.  **[TIMELINESS OF REPORTS]{.underline}**

We expect you to complete the report within the same time frame as for
an equivalent "conventional" appraisal. This is **7 calendar days in
most instances** (M-F, excluding holidays) from earliest receipt of the
26-1805 (whether electronically from TAS or faxed). **This applies to
all assignments except Master Certificate of Reasonable Value (MCRV** or
Committee) cases, in which your timeliness is 21 calendar days in most
instances.

If received after 5 PM, the assignment is received the next business day
(9 AM next business day). Violation of our timeliness standards result
in many suspensions, and will result in the failure to retain
probationary appraisers.

If you are unable to complete an assignment within a normal time frame
due to access problems, give the reason for the delay in the appraisal
report. Other reasons such as \"unusual property\", \"comparable sales
hard to find\", or \"heavy workload\" are unacceptable.

A pattern of tardiness (two timeliness violations within any three month
period) without proper justification may result in disciplinary action.

**5. APPRAISAL REPORT FORMS USED**

Effective January 1, 2001 use the following appraisal forms:

-   Single-family (not condominium): FNMA 1004 (URAR) Form.

-   Condominium: FNMA 1073 Condo Form.

-   2-4 Family: FNMA 1025 Small Income Property Form.

> (The supplemental Income/Expense Form
>
> is NOT required).

6.  **FEES, EXPENSES & COLLECTION PROBLEMS**

We understand that the fee structure varies slightly from state to state
and along the lines of former VARO jurisdiction. We hope to very soon
obtain the necessary concurrence in order to form an identical fee
structure throughout the four state SDN. Until that time, however, we
are bound by the outstanding written policy bulletins. Mileage is not
allowable except outside an appraiser's assigned counties.

**A. APPRAISAL AND INSPECTION FEES FOR ARKANSAS**

1.  The following fee schedule will be applicable to all VA appraisal
    assignments. This fee schedule applies to appraisals on properties
    in the State of Arkansas and the City of Texarkana in Bowie County,
    Texas.

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a.  One to Four Units

    Individual existing and proposed construction \$300.00

    Structures containing two living units 310.00

    Structures containing three living units 320.00

    Structures containing four living units 330.00

b.  Farm residence (with acreage) 300.00

c.  Assignments covering alteration, improvements or 300.00

    repairs - before and after values required

d.  Assignments covering requests for partial release 300.00

    value of the property as a whole, portion to be

    releases, and remaining portion required

e.  Compliance/Repair Inspections 100.00

    f\. Liquidation appraisals 300.00

On assignments outside of the assigned counties of an appraiser or
inspector, 25 cents per mile will be allowable for travel from the base
of operations pursuant to Arkansas State Highway map. No mileage shall
be allowed for assignments within the appraiser's/inspector's assigned
counties.

g\. Manufactured Homes

> Existing manufactured home \$155.00
>
> Inspection of proposed rental site (other than 50.00
>
> a manufactured home park) or lot owned by the
>
> veteran to determine acceptability or an individual
>
> manufactured home site.
>
> Appraisal of a lot and/or site preparation for 100.00
>
> purpose of determining reasonable value

Allowance for mileage will be on the same basis as on other assignments.

h.  Committee Appraisals

> Each basic plan or type per appraiser assigned \$ 300.00
>
> Each site or lot 60.00

An elevation that differs from the basic elevation of a plan or type to
the extent

that a different sales price is required will constitute an additional
plan or type for

determining the amount of the fee.

i.  Condominium Appraisals

Individual condominiums \$ 300.00

Committee (existing and proposed) - A one-time condominium master
project fee will be assessed the builder/developer on all proposed and
existing committee appraisal requests. The computation for committee
appraisal fees shall be divided into two steps as shown below, the
combination of which shall constitute the "total committee appraisal
fee".

Low rise and high rise - The fee for each committee member shall be
based on the

following:

[Number of Units in Projects]{.underline} [Fees Per Member]{.underline}

> 100 or fewer \$ 350.00
>
> 101 through 500 700.00
>
> 501 or more 1,400.00

Horizontal condominiums - The fee for each committee member shall be a
flat fee of

\$350.00 regardless of the total number of units in the project.
Additionally, the following shall be used for computation of fees for
the number of units and plan types:

Per unit - A fee of \$10.00 per unit shall be payable for each unit
appraised.

Per plan type - Each committee member shall also receive \$280.00 for
each plan

plan type appraised.

2.  Mortgagees are reminded that while this office is not involved in
    the actual billing process, these fees are established as the
    maximum allowable for VA appraisal. Any deviations from this fee
    schedule should be brought to the immediate attention of the

    Construction & Valuation Staff at 713-383-3117.

**B. APPRAISAL AND INSPECTION FEES FOR LOUISIANA**

The following schedule is the maximum allowed in Louisiana in all cases
where VA appraisal requests were assigned to VA appraisers. **NOTE:
Regardless of the amount of the maximum fee, appraisers and inspectors
must not charge veterans more than they charge other clients for similar
services. (RE VAP 26-7, Chapter 10.12)**

Existing Construction Single Family (URAR Fannie Mae Form 1004) \$325.00

Proposed Construction Single Family (URAR Fannie Mae Form 1004) 350.00

Liquidation Appraisals (URAR Fannie Mae Form 1004) 350.00

Existing Condominium Unit (Fannie Mae Form 1073) \$375.00

Proposed Condominium Unit (Fannie Mae Form 1073) 400.00

Liquidation Appraisals (Fannie Mae Form 1073) 400.00

Existing Multi Family 2-4 Living Units (Fannie Mae Form 1025) \$450.00

Proposed Multi Family 2-4 Living Units (Fannie mae Form 1025) 475.00

Liquidation Appraisals (Fannie Mae Form 1025) 475.00

Manufactured Housing (Non Realty) Unit Only \$150.00

Manufactured Housing (Non Realty) Unit & Lot 190.00

Committee Appraisals - Each Basic Type \$350.00

Each Lot 20.00

Condominium Committee Project Fees

Low Rise & High Rise - 100 or Fewer Units \$ 350.00

101 to 500 Units 600.00

Over 500 Units 1,200.00

> Horizontal (Townhome) 250.00

Condominium Committee - Each Plan Type 375.00

Condominium Committee - Each Unit 10.00

Repair Inspection Fee \$ 100.00

VA Compliance Inspection Fee - New Construction 100.00

Reconsideration of Value Fee\* 100.00

\*Covers requests when comparable sales provided for review were
[not]{.underline} available at the time of the initial appraisal of the
property.

**C. Appraisal and Inspection Fees for Oklahoma**

1.  The following schedule will be applicable to all requests received
    by the

> Department of Veterans Affairs:

a\. Origination appraisals (individual existing, proposed construction,
and \$325.00

manufactured homes on permanent foundation)

> b\. Liquidation appraisals \$350.00
>
> c\. Multi-Family (2-4 living units) \$400.00
>
> d\. Condominiums (individual/existing) \$400.00
>
> e\. Partial Release - two values required: Value as a whole portion on
> \$400.00
>
> "as is" basis and value of remaining portion/security
>
> f\. Mobile Homes \$175.00
>
> g\. Compliance/repair inspections \$100.00

h\. Committee appraisals (MCRV):

\(1\) Each basic plan type \$325.00

> \(2\) Each lot/unit \$ 30.00

2\. An allowance of \$.31 cents per mile for travel required outside the
appraiser's

assigned counties will be added to the basic fees shown.

**D. Appraisal and Inspection Fees for Waco.**

1.  Appraisal and inspection fees as indicated below are approved for
    areas under the jurisdiction of the Waco Regional Office.

    2\. Individual Appraisals:

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a.  Existing origination properties \$325.00

b.  Proposed origination properties 350.00

c.  Liquidation appraisals 350.00

d.  Condominium Units 400.00

e.  Multi-family:

    Two-family 400.00

    Three-family 450.00

    Four-family 500.00

f.  Miscellaneous appraisals for partial release and other unique,
    complex,

    large acreage, or estate-type property fees will be established by
    VA upon

    request.

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```
3.  Committee Appraisals (MCRV):

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```
a.  The fee is computed for each submission on the following basis:

> Each basic plan type (proposed) \$350.00
>
> Each lot/unit \$ 10.00

b.  Minimum fee \$500.00

4\. Used Manufactured Homes or Sites:

> Single-wide units \$145.00
>
> Double-wide units \$145.00
>
> Manufactured home site \$150.00

5.  Compliance/Repair inspection fee \$100.00

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```
6.  Mileage: No charge for mileage will be added to the above appraisal
    unless specifically authorized by the Chief of Construction &
    Valuation Section. Mileage charge may not exceed \$.32 cents a mile
    when permissible.

**E. Appraisal and inspection fees for Houston**

1.  **(These fees apply only to appraisals conducted in the 90 counties
    served by the Houston Regional Office.)**

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```
2.  Individual Appraisals:

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```
a.  Existing origination properties \$325.00

b.  Proposed origination properties \$350.00

c.  Liquidation appraisals \$325.00

d.  Condominium Units \$375.00

e.  Multi-family

> Two-Family \$375.00
>
> Three-Family \$425.00
>
> Four-Family \$475.00

f.  Miscellaneous appraisals for partial release and other unique,
    complex, large

> acreage, or estate-type property fees will be established by the VA
> upon request.

3.  Committee Appraisals (MCRV):

```{=html}
<!-- -->
```
a.  The fee is computed for each submission on the following basis:

> Each basic plan type (proposed) \$350.00
>
> Each lot/unit \$ 10.00

b.  Minimum fee \$500.00

```{=html}
<!-- -->
```
4.  Used Manufactured Homes or Sites:

Single-wide units \$145.00

Double-wide units \$145.00

Manufactured home site \$150.00

5.  Compliance/Repair inspection fee \$100.00

6\. Mileage: No charge for mileage will be added to the above appraisal
unless specifically authorized by the Chief of Construction & Valuation
Section. Mileage charge may not exceed \$.315 cents a mile when
permissible.

> **F. PAYMENT OF FEES**

Payment is due you once the appraisal and invoice are completed and
sent. Invoice payment periods should be 30 days, and we will assist you
in collection of fees that are 60 days past due (90 days total).

The VA may allow you to require payment *in advance* of completing an
assignment if:

-   you have documentation of a regular, ongoing payment problem and

-   documentation that the party responsible for payment will not
    respond

This sanction may be taken only against the offending branch office, and
VA should be advised and approve of any action in this regard.
Documentation should consist of copies of VA Form 26-1805, and previous
correspondence regarding past due accounts, records of telephone calls
made and any other information that you deem as supportive evidence. We
consider an unpaid bill exceeding 90 days as a problem which would
qualify.

***A2.*** **APPRAISER CONDUCT**

**1. GENERAL CONDUCT**

As a fee panel appraiser or inspector, you are considered as acting on
behalf of the VA. Courteous, professional conduct is expected. There are
*no* exceptions.

**2. CERTIFICATIONS REGARDING CONFLICTS**

You will be required to sign a certification that you have no outside
conflicts of interest (or else disclose them to us). We provide the form
and keep it on file. Note that *although you may have an outside
conflict of interest, this in itself does not eliminate you from VA fee
appraisal assignments*. This *does* mean that you should have a case
reassigned when a conflict arises! See VA policy below.

**3. VA POLICY CONCERNING CONFLICTS OF INTEREST**

The following statement of VA policy will provide some examples of
conflict of interest and some guidelines for fee personnel:

*It is neither the desire nor the intent of VA to interfere in the
private lives of Fee Appraisers or Compliance Inspectors or to infringe
upon their personal liberties. It is appropriate, however, for VA to
require that persons serving as Fee Appraisers and Compliance Inspectors
do not engage in private pursuits that conflict with their duties on
behalf of the VA. Except as may be otherwise expressly authorized by VA
regulations, instructions, or directives, VA requires that, as a
condition for appointment and retention on rosters or designated or
approved Fee Appraisers and Compliance Inspectors, and particular
individual serving in such capacities shall not engage in any private
pursuits where there may or will be:*

-   *Any connection established that may result in a conflict between
    the private interests of the VA Fee Appraiser or Compliance
    Inspector and his/her duties and responsibilities to VA and
    veterans.*

-   *Any circumstances wherein information obtained from or through a VA
    assignment to appraise or to make compliance inspections will be
    used to the detriment of the Government or veterans.*

Specifically, the foregoing statements of policy and the standards are
intended to preclude any Fee Appraiser or Compliance Inspector from:

-   *Selling land to a builder or sponsor and then making an appraisal
    or compliance inspection of a dwelling unit purchased by a veteran
    with guaranteed, insured, or direct loan.*

-   *Owning an interest in, being employed by, or operating an
    architectural, engineering or land planning firm which renders
    services to builders or sponsors and later accepting an assignment
    from VA to appraise or inspect dwelling units built or to be built
    by a particular builder or sponsor for whom architectural,
    engineering, or land planning services have been rendered by the
    firm in which the Fee Appraiser or Compliance Inspector has
    employment or an interest.*

-   *Appraising or inspecting dwelling units on VA assignments and later
    accepting exclusive selling rights for the homes.*

-   *Appraising or inspecting properties for builders or sponsors who
    are purchasing hazard insurance or title services with respect to
    those properties from a company in which the Fee Appraiser or
    Compliance Inspector has an interest.*

-   *Owning an interest in a project developed by a builder and
    accepting VA appraisal or inspection assignments in another area
    which the same builder owns, is building, or is handling as real
    estate broker.*

-   *Having an interest in or representing building supply firms and
    accepting VA assignments on dwelling units built by builders or
    sponsors who deal extensively with such supply firms.*

-   *Accepting a VA assignment to appraise property if the fee is
    contingent upon supporting a predetermined conclusion.*

The above examples are certainly not all the examples of a conflict, but
they do illustrate some obvious conflicts of interest.

**You are not permitted to act as sales agent or listing broker in
connection with a property you are assigned to appraise. If you receive
an appraisal or inspection request related to VA financing on such a
property, you must immediately contact VA at (713) 794-3607 and request
a reassignment.**

*Notify us immediately if you are elected or appointed to public office,
or if affiliated with any new lender, builder, or realty firm; or if you
have a financial interest in the property to be appraised*.

**4. USE OF ASSOCIATE APPRAISERS**

You may obtain assistance in the gathering of field data, such as
researching courthouse records, verifying market information and
assembling the report; however, YOU are personally responsible for all
information in the report. *You must personally inspect the property
inside and out, and inspect at least the exterior of each comparable
sale used. You must also select and analyze the comparable sales and
determine the final value estimate*.

We will allow an assistant to document qualifying experience for future
licensing and certification purposes; however*, you must sign the
appraisal report as the appraiser.*

If we find that someone other than you completed the appraisal, then you
are subject to disciplinary action by us which can include removal from
the fee panel.

**5. DIVULGING INFORMATION FROM THE APPRAISAL REPORT**

Generally, you must discuss your report with any employee of the VA
Regional Loan Center, the local VA Regional Office, a LAPP Staff
Appraisal Reviewer (SAR), our vendee appraisal reviewer (Countrywide) or
a SLMP loan servicer (see Sections A5-A7). You are not required to
discuss valuation issues with real estate brokers and agents, buyers or
property owners, but are not precluded from doing so to maintain
effective relations.

Under the Freedom of Information Act, any VA appraisal report will be
made available to any party upon written request sent directly to us.
You may provide copies to any interested party unless a violation of
USPAP.

***A3*. ELIGIBLE PROPERTIES - TYPES**

Most 1-4 family properties are eligible for VA appraisal. They fall into
one of the following three category types:

**1. EXISTING CONSTRUCTION**

These are 1-4 family dwellings for which the improvements have been
completed for at least one year, or completed less than one year *and*
previously owner-occupied.

Appraisals are based upon an inspection of the dwelling, either "As-Is"
or "Subject To" completion (of VA MPR repair items).

If extensive remodeling is to be done, then you may request additional
information

(See Section C6 - Renovations).

**2. NEW CONSTRUCTION (Appraised as Existing)**

These are 1-4 family dwellings less than one year old *and* never
owner-occupied, and complete to *at least* the Customer Preference
stage. Customer Preference items (such as carpet, appliances and some
trim items) are typically selected by the purchaser.

Do [no]{.underline}t mark these appraisals as "subject to completion per
plans /specs" If work is to be completed the appraisal should be marked
"as repaired".

All exterior work should be complete except for cold weather-related
delays *only* (such as incomplete exterior painting and landscaping.)

These properties are appraised based upon inspection of the dwelling,
either "As-Is" or "Subject To" completion of the remaining Customer
Preference items.

If you inspect the property and determine that it has not yet reached
the Customer Preference stage, then the property is not eligible for
appraisal. Notify the lender that the dwelling is not to the customer
preference stage and why. Ask that they inform you when the dwelling
reaches this stage of completion. *You may bill the lender for an
inspection fee.* You may delay your report for 30 days without further
approval from VA, be sure to properly document your appraisal report
concerning the delay.

**3. PROPOSED CONSTRUCTION**

1-4 family dwellings where construction has not started, or under
construction. If ordered proposed, the appraisal can be done even if the
house is complete.

Plans and Specifications are used to establish the value (see Section
C3).

**4. PUD's and CONDOMINIUM's**

Condominiums require VA (or FHA) approval *prior* to Loan Guaranty.
PUD's *do not*.

Always report mandatory HOA fees that are lien supported.

The PUD section will be completed by VA fee appraisers, as appropriate.
In general, a PUD is a project (or subdivision) that includes common
property and improvements that are owned and maintained by an owners'
association for the use and benefit of the individual units in the
project (or subdivision). A project (or subdivision) is classified as a
PUD if each individual unit owner is automatically a mandatory member of
the owners association and is obligated to pay mandatory assessments.
(Zoning is not considered to be a basis for classifying a project or
subdivision as a PUD.)

***A4.* MINIMUM PROPERTY REQUIREMENTS (MPR'S)**

**1. PROPERTY CONSTRAINTS and PERSPECTIVE**

VA has no specific property constraints regarding dwelling size, room
counts, quality of construction or repair of specific code violations.

***In Existing and New Construction the primary objective is that the
property be Safe, Sound and Sanitary, and meet the livability
requirements necessary for the market area where it is located.***

***In Proposed Construction the objective is to ensure that the dwelling
is constructed according to applicable building codes, Federal
regulations and HUD guidelines.***

MPR's include both requirements and guidelines. Guidelines can be
interpreted differently from one area to another. For example, a good
supply of water for a rural property may be a private well, but a city
property should have public water.

***A property is not eligible for appraisal unless there is a reasonable
likelihood that it can meet VA Minimum Property Requirements.*** If you
inspect a property (or review plans) and determine otherwise then
provide recommendations for correction. Notify all parties of these
violations.

**2. MPR's for EXISTING and NEW CONSTRUCTION**

> **a. Property Access**

-   **Access to the Site:** Each property must have access from a public
    or private street. The street must have an all-weather surface.

Private streets must be protected by permanent easement and maintained
by an

HOA or joint maintenance agreement.

-   **Access to the Unit and Rear Yard:** The unit must have access
    without passing

through another unit. Each living unit must be able to be used and
maintained

individually without trespass upon adjoining properties. Required
easements must

run with the land.

Rear yard must have access without passing through any other living
unit. For a

row-type dwelling, the access may be by means of alley, easement,
passage through

the dwelling, or other acceptable means.

-   **Access for Wall Maintenance:** There must be adequate space
    between buildings to permit maintenance of the exterior walls.

> **b. Property Characteristics**

-   **Entity:** The property must be a single, readily marketable real
    estate entity.

-   **Use:** The use must be primarily residential. If a portion of the
    property has non-residential use, it must not impair the residential
    character of the property or exceed 25% of the total gross floor
    area. Provide total square feet of commercial use and total square
    feet of residential use.

-   **Living Area and Facilities:** Each unit must have sanitary
    facilities and enough space to assure suitable living, sleeping,
    cooking and dining.

Laundry, storage, heating and other facilities may be shared in 2-4 unit
buildings.

-   **Utilities:** Utilities (water, sewer, gas, electricity) must be
    independent for each unit. Several units under one ownership may
    share utilities if there are separate shutoffs.

Individual utilities must not cross another unit unless there is
permanent legal right of

access for repair and maintenance.

Units under separate ownership may share common utilities (such as
shared well)

provided that the connections are protected by easement or covenant and
(that)

there is an acceptable maintenance agreement.

-   **Mechanical Systems:** Mechanical systems must be safe to operate,
    be protected from destructive elements, be of adequate capacity and
    quality, and have reasonable future utility.

-   **Heat:** Heat must be adequate for healthful and comfortable living
    conditions. If wood-burning stove is primary heat source then there
    must also be a conventional system that will maintain at least a 50
    degree temperature in the plumbing areas.

If Solar system is primary heat/hot water source then there must be a
"backup"

system which will provide equivalent (100%) utility.

-   **Electricity:** Each unit must have adequate electricity for
    lighting and necessary equipment.

-   **Water and Wells:** Each unit must have a continuing supply of
    potable (drinkable) water along with domestic hot water. Connection
    to public water is required whenever feasible.

Water quality from an individual water supply must meet the requirements
of the local

health authority. If no local health authority then EPA guidelines
apply. Water must

be potable from the source, independent of any individual treatment
system.

A shared well must be capable of producing adequate water for each
property

simultaneously. There must be a permanent easement to allow access for

maintenance and repair. There must be a recorded well-sharing agreement
which

provides for repair and maintenance of the system.

A Community Well must be sufficient for the project and water quality
must be

approved by local or State Health Officials.

> Health department approved cisterns will be accepted when public water
> is not available and when safe, potable water cannot be obtained from
> drilled wells.

-   **Sanitary Facilities, Sewage and Septic:** Each unit must have
    sanitary facilities

and a safe method of sewage disposal. Connection to public sewer is
required

whenever feasible.

Individual and Community sewage disposal systems must operate properly.

Pit privies are permitted where they are customary *and* are the only
feasible means

of disposal. They must be installed in a manner recommended by the local
health

authority. If there are no local health authority requirements then U.S.
Public Health

Service requirements apply.

-   **Roof:** The roof must prevent the entrance of moisture and have at
    least three years remaining useful life. All old shingles must be
    removed if a defective roof has two or more layers.

-   **Ventilation:** There must be sufficient natural ventilation in
    areas such as attics and crawl spaces to minimize the effects of
    excess heat and moisture.

-   **Crawl Space:** The crawl space must have adequate access, be
    properly vented and clear of all debris. Excessive dampness or
    ponding of water must be corrected.

Floor joists must be high enough to allow access for maintenance and
repairs of

ductwork and plumbing.

-   **Party Walls:** A party wall constructed at the property line must
    extend the full height of the building (foundation to roof ridge).
    The wall may separate semi-detached or row units.

**c. Defective Conditions**

-   **Site:** The site must be properly graded to provide positive
    drainage (away from the dwelling), and to prevent water from
    ponding. Ground cover must be stabilized to prevent erosion.

-   **Improvements:** Any condition impairing the safety, sanitation or
    structural soundness of the property must be corrected so that the
    probability of further damage is eliminated.

Some of these conditions include defective construction, poor
workmanship,

evidence of continuing settlement, excessive dampness, leakage, decay
and

termites.

Specific examples of common problems include rotted exterior wood trim,
peeling

paint, roof leaks, broken windows, plumbing leaks and exposed electric
wiring.

Other examples include damage caused by infestation, fungus growth or
dry rot.

-   **Lead-Based and Defective Paint:**

> Defective paint (cracking, scaling, peeling, chipping or loose) on
> homes built prior to
>
> 1978 will be considered lead based and must be corrected. Defective
> paint on homes built after 1978 should be corrected only if this poses
> a threat to the security of the improvements.

**d. Other Hazards**

-   **Onsite:** The property must be free of hazards (such as subsidence
    or flood or erosion problems) which may adversely affect the health
    and safety of the occupants, the structural soundness of the
    improvements, or which may impair the customary use and enjoyment of
    the property by the occupants.

-   **Offsite:** *High Voltage Electric Transmission Lines and Gas and
    Petroleum Pipelines:* The dwelling structure must be located outside
    of the easement area(s). Other onsite improvements can be located in
    the easement area(s), but cannot be awarded value.

If a Proposed Construction Dwelling is located outside the Pipeline
easement but

less than 220 yards away from the centerline, additional conditions
apply.

**3. MPR's for PROPOSED CONSTRUCTION**

> **a. Building Codes**

All State, County or Local Building Codes apply. If there are none, then
VA MPR\'s are the applicable provisions of the current International
Residential Code, One and Two Family Dwelling Code. The 1992 CABO Model
Energy Code applies either way.

> **b. Federal Regulations**

The *Construction Requirements* in 24 Code of Federal Regulations (CFR)
200.926d apply.

If no local building code(s) then the applicable provisions of the
current International Residential Code, One and Two Family Dwelling Code
also applies.

**c. HUD Guidelines**

Standards and practices as recommended in HUD Land Planning Handbooks
4140.1, 4140.2 and 4140.3 apply.

Suitable construction methods and materials as referenced in HUD
engineering bulletins also apply.

***A5.* LENDER APPRAISAL PROCESSING PROGRAM (LAPP)**

**1. THE LAPP PROGRAM**

In certain cases involving origination loans the lender has been
delegated the authority to review appraisal reports and determine the
reasonable value of properties for VA. These cases are processed under
the Lender Appraisal Processing Program (LAPP).

To determine if you have received a VA LAPP case, look for the word
\"LAPP\" next to the VA case number in the upper right section of the
Appraisal Request form (VA FORM 26-1805).

**2. ELIGIBLE PROPERTIES UNDER LAPP**

All individual properties eligible for VA appraisal and VA financing may
be processed by LAPP underwriters. This includes 1-4 family, condo's,
manufactured (mobile) homes and modular housing. Construction may be
existing, new or proposed.

The only exceptions are requests for a Master Certificate of Reasonable
Value (MCRV), which are still processed and issued by this office,
liquidation and partial releases.

**3. APPRAISER/LENDER COOPERATION**

The LAPP program works the same as for Conventional appraisals.

LAPP Staff Appraisal Reviewers (SAR's) should contact you directly when
they need clarification, correction, or additional value support. If you
are contacted by someone else concerning the appraisal, refer them to
the SAR.

If the SAR still has concerns about the appraisal after contacting you,
they will usually contact us next. We will attempt to resolve any issues
in the report. In some instances we may request additional information
from you.

Both appraisers and SAR's should conduct themselves in a businesslike,
ethical, and professional manner. Failure by either party to do so may
lead to administrative sanctions by us.

4.  **CHANGE OF VALUE under LAPP**

At the same time the notice of value is issued, the lender's staff
appraisal reviewer (SAR) may issue a NOV that is up to 5 percent above
or below the fee appraiser's value estimate provided the adjustment is
clearly warranted and fully supported by:

-   The real estate market, or

-   Other valid data considered adequate and reasonable by professional
    appraisal standards.

Any change in the fee appraiser's value estimate, whether made by VA
staff or the SAR, must be clearly warranted and fully documented.

***A6.* SERVICER\'S LOSS MITIGATION PROGRAM (SLMP)**

**1. SLMP and the SERVICER'S ROLE**

The Servicer's Loss Mitigation Program (SLMP) allows some loan servicers
to provide additional loan servicing on behalf of VA for delinquent
loans. The SLMP program emphasizes early intervention by the loan
servicer to try to prevent a foreclosure from taking place. Depending
upon the outcome of the process the loan servicer either collects a fee
or files a claim through VA.

**2. APPRAISAL REQUESTS**

The Appraisal Request form (26-1805) should indicate "SLMP". SLMP
appraisal requests may also (but not always) indicate that the
lender/servicer is processing a VA Refunding, a Compromise Sale, or a
Deed-in-Lieu of Foreclosure.

**3. APPRAISAL PROCEDURES**

Follow the guidelines for a Liquidation Appraisal report (see Section
C4). **The fee appraiser [must gain]{.underline} access to all SLMP
appraisal request cases, [no exceptions]{.underline}.**

Send the report directly to the requester in accordance with the
instructions on Sending the Appraisal Report (see Section B2, para 2.
Liquidation Requests).

***A7.* VA PORTFOLIO LOANS**

**1. VA IS THE LENDER**

A portfolio loan is one where VA is the lender ("vendee"). We provide
vendee financing for some of our foreclosure sales. We also provide
vendee financing when we refund a lender (pay the private lender off and
become the lender for the Veteran). In a refunding, VA readjusts the
loan to terms more favorable to the Veteran.

**2. THE APPRAISAL REQUEST**

Appraisal requests will show the lender as the VA. The appraisal request
will show the letters "LPL" in the upper right hand corner of the form,
next to the VA Case number.

*This is a foreclosure appraisal request.* The loan is now in default.

**3. APPRAISAL PROCEDURES**

Follow the guidelines for a Liquidation Appraisal report (see Section
C4).

Use the guidelines for Sending the Report (see Section B2, para 2.
Liquidation Requests).

**SECTION B:**

**APPRAISAL/INSPECTION GUIDELINES**

***B1.* GENERAL APPRAISAL STANDARDS**

**1. DEFINITION OF VALUE**

The definition of value used by VA is *\"That figure which represents
the amount a reputable qualified appraiser, unaffected by personal
interest, bias or prejudice, would recommend to a prospective purchaser
as a proper price or cost in the light of prevailing conditions\".* VA
considers reasonable value and market value to be synonymous.

The VA definition of market value is consistent with that used by Fannie
Mae (FNMA), Freddie Mac (FHLMC) and the major appraisal organizations.
That definition directs appraisers to *\"determine the most probable
price which a property should bring, or for which the appraised property
should sell in a competitive market, under all conditions requisite to a
fair sale, with the buyer and seller acting prudently, knowledgeably,
and assuming the price is not affected by undue stimulus\"*.

**2. VA APPRAISAL STANDARDS**

The appraisal should be completed in accordance with all current USPAP
standards, using the correct appraisal form. The appraisal report may be
either a Self-Contained or a Summary report. Additional VA report
requirements are given below.

**3. USE OF APPRAISAL SOFTWARE**

We will accept software-generated appraisal forms that increase sections
of the form to allow for expanded narrative comments. The expansion must
leave the Sales Comparison Section intact (not separated across pages)
and the sequence of information must remain in the same order.

***B2.* GETTING AN ASSIGNMENT**

**1. ORIGINATION LOAN REQUESTS**

**Timeliness for all VA appraisal assignments is seven calendar days**.
For origination (new loan) cases a completed VA Form 26-1805, (Appraisal
Request Form) and ratified sales contract (if purchase) are forwarded
directly to you from the lender/sponsor upon assignment. These
assignments are processed as either \"regular VA\" or as Lender
Appraisal Processing Program (LAPP) cases. LAPP cases will denote
\"LAPP\" in front of the case number. You may use the sales contract to
visualize the incomplete features, since no exhibits will be provided.

Proposed Construction cases must include a set of all necessary plans,
specifications and other exhibits necessary to complete the appraisal
(see Section C3).

**2. LIQUIDATION REQUESTS**

Liquidation appraisal requests should specify \"LGI" or "LPL" in the
upper right section of the request form. SLMP cases are always
liquidation appraisals. (See Sections A9, C4)

When VA is the lender (the "Vendee"), the appraisal report will be
provided directly to Countrywide Home Loans. Please upload the report to
E-Appraisal, and email a copy of it to the email address of the
requestor.

For condominium liquidation reports, you only need the Appraisal
Request.

**3. INSPECTION REQUESTS**

These Inspection Requests pertain [only]{.underline} to repairs on
existing or new existing properties. Obtain, from the lender, a copy of
the Notification of Value Letter (NOV) from the lender. *You should be
identified as the inspector on the form.* The NOV letter can be used as
authorization for billing purposes.

*The repairs may have been changed somewhat from what you specified in
your appraisal report*. This is because the repairs were amended,
clarified or considered as unnecessary (not VA MPR) by the underwriter.
Inspect the repairs as given. If you have questions or concerns then
contact us or the LAPP underwriter.

4.  **CANCELLATION POLICES**

**Fee appraisers will cancel any assignment (originations and
liquidations also) in which the VA 26-1805 has not been received by the
fee appraiser within 7 calendar days of the date assignment reflected by
TAS. This cancellation will be communicated to VA by email to
lgyhurar@vba.va.gov. The fee appraiser should briefly describe the
reasons for cancellation. You will receive make up assignments when
cases are cancelled (and only when they are cancelled).**

**But this should not be confused with cancellations
[*after*]{.underline} the request has been received by the fee
appraiser**. And certain questions always arise: What if the 1805 does
not contain sufficient info to proceed with the appraisal (legal,
address, contact point for entry), or contains incorrect data which I
must have? What if I cannot obtain a copy of the sales contract? What if
the broker or seller is out of town? What if the requestor has owed me
money for over 60 days (minimum, and it must be the same branch office)
on another case, and I have delayed this case after advising them
payment in advance in required? What if I cannot obtain certified plans
and specs for a proposed case? What if the subject builder or realtor
wishes to submit comparables or contracts (and they should always be
invited to do so), but has delayed furnishing the require docs? What if
the seller wishes to delay the appraisal for repairs? Etc.

**Fee appraisers will cancel any assignment (in which the 26-1805 has
been received timely but) in which *necessary* additional data is
required to proceed with the assignment, when such data has not been
received within 7 calendar days of receipt of the 26-1805.** Appraisers
should not make a trip, run comps or do anything else until all required
assignment info is received. In such cases the fee appraiser must first
contact the requestor and advise them of the info necessary, which means
**the fee appraiser must review the 26-1805 and request needed info the
first day of receipt** in order to provide a reasonable period for
response before cancellation. **These cancellations will be communicated
to the lender (requestor) and to VA as above (email lgyhurar@vba.va.gov)
by the appraiser.** Appraisers may request VA extensions of the 7 days
by email *if the situation warrants*, and VA will generally grant
extensions of 3 days upon request. **When canceling, appraisers must
advise VA of the names of parties contacted, the data which was not
provided and the dates of contact.**

**Delays resulting from any reason for cases which are not cancelled
(partial delays resulting from the above but short of cancellation, or
otherwise) must be fully documented on the URAR, in the item containing
the REL to the right of the cost approach section**. **Appraiser
timeliness does not begin until all necessary info is received, *but may
not delay timeliness* for reasons which is not essential.** Failure to
document will be considered the equivalent of a timeliness violation,
and **two of either violations within any three month period will
constitute grounds for an administrative sanction.**

**New existing properties** which are requested as complete to the
customer preference stage, but which are not completed to that stage at
the time of inspection (items which may remain incomplete-carpet,
padding, appliances, lighting fixtures, minor touch up painting or
finish items, exterior A/C units-basically items which may be easily
stolen and do not require extensive construction to install, the quality
of these items may be visualized by the sales contract, or plans and
specs when voluntarily made available). When such dwellings are not to
the stage of eligibility, the fee appraiser should photograph the
interior (to prove his/her point), then contact the requesor, advising
them only that the dwelling is not ready and to contact him when it is
ready for appraisal. **The fee appraiser may charge an additional \$100
inspection fee (max), and automatically extend the assignment for up to
30 days.** If still incomplete after 30 days (only), contact the VA
office by email (lgyhurar@vba.va.gov), and we may further extend
timeliness.

**Vacant liquidations**. Absentee owners do not constitute vacant
dwellings, and if furniture or personal property, for sale signs,
tenants, storage, etc. is present, and the appraiser cannot obtain
entry, a drive by should be performed after meeting our manual
requirements for entry contacts. But **if truly vacant, the appraiser
must contact the requestor and require their assistance in entry**.
**These cases will not be cancelled**, and may remain pending for some
time. **The fee appraiser must also immediately email VA (title vacant
LIQ to lgyhurar@vba.va.gov) and explain the situation, advising VA of
the parties contacted for entry. The appraiser must contact the
requestor no less than each 30 days afterward, and VA must be updated at
30 day intervals. Otherwise, VA will be obligated to pay mortgage
interest payments to the servicer, and the fee appraiser will be held
responsible**.

Of course, a delay of two working days is also permissible in
conjunction with your requirement to notify the requester when an
appraised value is below the sales price prior to completing and
submitting your report. See Section B7. "Requirements if Appraised Value
is Below Sales Price." If this procedure is followed, the Point of
Contact (POC) of the requester has two additional business days to
submit additional data, and it is reasonable to permit the fee appraiser
additional time to evaluate this data, complete a field review if
necessary, etc. So we will permit the fee appraiser an additional three
days when necessary once this data is received from the POC, and the
URAR must be fully documented (five additional days in aggregate).

***B3.* PREPARING THE APPRAISAL REPORT**

**1. FILE NUMBER & VA AS LENDER CLIENT ON THE URAR**

Put the VA case number (LH number) from the appraisal request form onto
the upper right corner of the appraisal form and on all addendums. Place
the VA case number directly above the \"File No.\" space on the front
page if you use a separate file number.

-   **Insert "DEPARTMENT OF VETERANS AFFAIRS" after lender/client on the
    URAR on all VA case assignements.**

-   **Identify the type of intended user by insertitng "Intended
    User-Any VA Approved Lender" on the lender/client line following
    "Address"**

**2. NEIGHBORHOOD SECTION**

Review and analyze competitive offerings (listings) and/or pending
sales, to determine if market conditions are changing significantly.
Such changes include:

-   a change to an oversupply or shortage of housing stock, or

-   marketing times which have increased or decreased significantly, or

-   changes in employment stability, or

-   significant increases in sales or financing concessions by sellers.

Time adjustments are OK when appropriate, however, you should not have
to use time adjustments very often if recently sold comparables are
available and used. If you do use time adjustments you must include a
brief explanation on the appraisal of the basis for the time adjustment.
In some cases you may even be able to use published MLS trend data to
back up your time adjustment. In all cases, you should be able to back
up the time adjustment with documentation in your field notes, which is
in conformance with USPAP requirements.

If your market analysis indicates no significant changes, then the
formal (written) analysis of listings and/or pending sales does not need
to be submitted. Instead, provide the following certification in the
Neighborhood section of the form which states:

*\"I have considered relevant competitive listings and/or contract
offerings*

*in the performance of this appraisal. Any trend indicated by that data*

*is supported by the listing/offering information included in this
report".*

**3. MARKET CONDITIONS SECTION**

There are three specific topics which you must address in the market
conditions subsection.

-   **Sales or Marketing concessions:** Discuss and note their impact on
    prices, if

    any (example: \"sellers typically pay 2-3 points and small portion
    of buyers settlement

    costs with no value impact\").

    Note that builders typically offer financing and other incentives
    not readily available to

    purchasers of resale properties. Examples include interest rate
    buydowns,

    miscellaneous giveaways, inclusion of non realty items into the
    transaction, payment

    of buyer\'s closing costs, loan discount points and origination
    fees. Review the

    financing programs of other builders to determine typical vs.
    excessive financing and

    sales concessions. Comparable sales should be adjusted for excessive
    concessions.

-   **Sale price/list price ratio:** Provide an estimate or statistics
    from available data

sources. A range is acceptable (example: \"MLS data indicates properties
typically

sell at 95-98% of list price\").

-   **Marketing Time:** Discuss whether typical marketing time is
    increasing, decreasing or

stable. If marketing time is increasing or decreasing, then indicate to
what extent

(example: \"in the last six months the listing period has decreased from
180 days to

90 days\").

**4. SITE SECTION**

-   **Water and Sewer:** For private wells, report if the well is shared
    or located off of the subject site. On new construction note if the
    well is new or existing. For individual septic systems, note ANY
    signs of malfunction.

For properties having private well and septic*, note if public utilities
appear to be*

*available to the site*.

> You must also distinguish between public systems and community systems
> on your report.

-   **Streets and Drives:** Note whether the street is public or
    private, and whether the service drive is private or shared.

-   **Flood Zones:** (See Section C6 - Flood Zones)

-   **Noise Zones:** Indicate noise zone and DNL. If not in noise zone,
    so state.

**5. COST APPROACH SECTION**

The Cost Approach is not required unless unusual circumstances dictate
(such as total absence of comparable sales or a very unique property).
The market typically does not use the Cost Approach as a basis to buy
and sell residential properties. Accordingly, there is also no minimum
or maximum land-to-value ratio. Do provide:

-   **Gross Living Area:** Show GLA calculations unless they are
    elsewhere in the report.

-   **Remaining Economic Life:** Provide an estimate of the maximum
    Remaining Economic Life (REL) of the improvements. A range (such as
    45-50 years) is acceptable. If the maximum estimate is less than 30
    years then explain why. *The loan term is adjusted to the REL if
    less than 30 years.*

**6. SALES COMPARISON ANALYSIS SECTION**

-   **Selection of Comparable Data:** *All comparable sales must be
    closed,settled sales.*

In verifying sales you may use a single source if the data is actually
confirmed or

verified through closed or settled transactions. If your data source
does not confirm

or verify the sales data then use additional sources to obtain
verification.

Explain the use of comparable sales located outside of what would be
considered

the subject\'s market area. Include *additional* sales data and/or
supplemental

narrative comments when the sales data does not lend itself to typical
comparison.

Explain the use of comparable sales over twelve months old. In normal
markets, it is

probable that sales over three to six months old would be considered as
outdated

and you should comment accordingly.

> A "mix" of VA, FHA and Conventional sales is encouraged whenever
> possible (but not required). Do not use terms such as "typical".
> Describe the comparability to the degree possible.

Proximity of the comparable sales should be given as *distance and
direction* (e.g. 3

blocks east or 5 miles northwest) and/or a suitable map reference.

-   **Adjustments:** All adjustments must be based upon market reaction.

Explain time adjustments \_

\_

Explain or clarify financing adjustments.

For new housing, if you adjust for options they must have been
personally confirmed

by a review of the closing documents. Although VA does not require
submission of

these documents, you must retain sufficient documentation to support
your appraisal.

There is no VA requirement for maximum gross or net adjustments.
However,

explain large overall adjustments and why the choice of comparable
sales.

-   **Estimating a Value**: Estimate a value estimate from *within* the
    range of indicated values provided by the analysis of the comparable
    sales if no other approaches to value are employed.

**7. RECONCILIATION SECTION**

-   **Final Value Estimate:** Rely on the value selected from the Direct
    Sales Comparison Approach except in very unusual circumstances.

***Any finding by us that your analysis is not based upon recognized
appraisal practices, and was intended to \"meet\" or \"accommodate\" the
sales price will cause the report to be unacceptable, and you will be
subject to disciplinary action.***

-   **Conditions of Appraisal:** For Origination appraisals completed
    "Subject to" MPR items, the "Conditions of Appraisal" line should
    state "Subject to the MPR repairs noted in the Comments Section of
    the report".

Note: Foreclosure/Liquidation reports are always completed \"as-is\",
even if repairs

are needed.

-   **Requirements if Appraised Value is Below Sales Price:**

> On assignments in which the appraised value is below the sales price,
> you must complete the following steps prior to completing and
> submitting your report.
>
> Notify the Point of Contact: If the requester, on the appraisal
> request form (VAF 26-1805, Request for Determination of Reasonable
> Value), has provided specific Point of Contact (POC) information, VA
> fee appraisers are required to notify the listed POC when it appears
> that the appraised value will come in below the sales price of the
> subject property. The requestor may designate whomever they feel is
> most appropriate as the POC including the Realtor, Loan
> Officer/Originator, etc. If this information is not provided, the
> appraiser will be required to call the appraisal requestor shown on
> the appraisal request to make such notification.
>
> (Since there is currently no field for POC information in The
> Appraisal System (TAS) request screen the lender will enter the
> specific contact information in field #30, Comments on Special
> Assessments or Homeowner's Association Charges. The information should
> read: POC for Appraisal Issues is: (ex. John Doe, (800) 123-4567,
> JDOE@XYZ.COM).
>
> The appraiser will not be at liberty to discuss the contents of the
> appraisal with the POC at this point beyond explaining that they are
> calling for whatever additional information the POC may be able to
> provide. We expect full cooperation between the fee appraiser and the
> specified POC or lender.
>
> Once the fee appraiser has notified the lender or POC, they will have
> 2 working days to provide additional information to the fee appraiser,
> in a format similar to the comparable sales grid on the URAR.
> Verification that the sale actually closed is also required. If
> pending sales contracts are submitted to support a time adjustment,
> they must be complete with all contract addendums attached. In
> addition, there should be a brief narrative attached that describes
> the similarities/differences between the pending sale and the subject
> property.
>
> After receipt of any additional information, the appraiser will
> complete the appraisal report indicating that this process was
> utilized. If the information provided to the appraiser does not result
> in an increase in value that meets or exceeds the sales price, the
> appraiser will report on an addendum the following information:

-   Who provided the information,

-   what information was provided, and

-   why it did not change the opinion of value.

In either situation, the appraiser will include a comment regarding the
amount of time this process added to the overall appraisal delivery. VA
and Lender Staff Appraisal Reviewers (SARs) will monitor this factor and
determine if reasonable timeliness was adhered to.

Fee Appraiser Responsiveness to Program Participants. VA fee appraisers
are expected to represent the Department of Veterans Affairs in a manner
that reflects professionalism and is oriented toward customer service.
VA fee appraisers are expected to provide a status report on anticipated
delivery date of their work when requested by any legitimate party to
the transaction: i.e., lender, realtor, buyer/seller.

However, fee appraisers are not required to defend or discuss their
reports with all members of the public. Questions on the content of an
appraisal report should be directed to either the VA RLC of jurisdiction
or the Lender's SAR.

**8. SIGNATURE SECTION and DATE OF RECEIPT**

You must sign the report as the Appraiser, not as Review Appraiser.
*Place the date you received the appraisal and the date mailed in the
"Comments on Cost Approach" section at the top of page two of the URAR.*

***B4*. APPRAISAL REQUIREMENTS FOR MPR's**

**1. OVERVIEW**

Recommend only those repairs needed to make the property conform to VA
Minimum Property Requirements (MPR's). Cosmetic repairs are not
required, so consider them in the overall condition rating and valuation
of the property. (For cosmetic repairs specified in a purchase contract,
see Section C6 - Contract Repairs).

In *Existing Construction*, typical MPR repairs are for maintenance
needed to prevent \"continued deterioration of the improvements\", such
as deteriorated exterior walls and trim, roof leaks, and exterior
painting.

A property is ineligible for appraisal (for new VA loan) if you consider
the repairs to be so extensive that the property likely cannot be
corrected to meet MPR's. Call us for guidance when necessary; you may be
instructed to reject the property.

**REPORTING MPR ITEMS**

*List each repair or completion item in the appraisal report along with
an estimated cost to complete that item*. Be as specific as possible so
that repairs (and repair costs) reflect only the work that is needed.
Explain the reason for any repairs that are not obvious.

**VA does not require an existing property to meet local code
requirements unless any specific repair item constitutes a violation of
VA Minimum Property requirements**, and repairs should not be listed
*solely* because of local code violations. However, if a specific
situation creates an unsafe, unsound or unsanitary condition, it must be
addressed.

Sometimes a problem is evident but the cause is not, or is beyond your
expertise. Examples include wet basements and
roofing/plumbing/heating/electrical problems which may have several
possible causes. You should describe the problem and require that it be
corrected.

Do not routinely request systems checks. However, since origination
appraisals are completed "as repaired," it would be impossible to
identify such necessary repair items when systems are off. Therefore you
should require systems checks when the utilties are turned off during
your inspection.

This will not apply to new dwellings, in which the equipment may be
reasonably assumed in good working order. Nor will this apply to
liquidation appraisals which are different since they are appraised
"as-is," and there will be nobody to turn on the utilities, or to repair
them if needed, so this requirement is only for origination appraisals.

For serious functional or structural problems such as foundation
settlement or wall cracks that appear to need correction, recommend a
structural engineer inspection and report which addresses the specific
problem.

*If final sitework for a new house is incomplete, require specifically
that the builder \"stabilize the ground cover\".* Stabilizing the ground
cover means that upon completion of all sitework, there will be proper
drainage and no areas of erosion or ponding.

Usually this is completed by grading and seeding. In some cases this is
insufficient (due to severe slopes or poor soil conditions) and grass or
sod is needed. If you reinspect the sitework, consider each site
individually. Counties within the WACO Regional Office Jurisdiction Area
are exempt from the requirement for stabilizing ground cover.

***B5.* DEFECTIVE PAINT REPAIRS**

**1. DEFINITIONS**

\"Lead-based paint\" means any paint or other similar surface coating
material containing lead or lead compounds which exceeds the percentage
of lead by weight permitted by law.

*A "Defective paint condition\" is any paint on any surface (inside or
out) which is cracking, scaling, chipping, peeling, or loose.*

**A "defective paint condition" is considered as consisting of
lead-based paint on all homes** **built prior to 1978**. Since we
usually do not require testing of the paint, the defective condition is
considered as an MPR repair item and must be corrected.

**2. REPAIR OF DEFECTIVE PAINT**

Require that the surface be properly prepared, and then repainted with
two coats of a suitable nonleaded paint. All work performed to correct
defective paint surfaces on houses built prior to 1978 should be done in
accordance with all applicable codes and laws regarding the correction
of lead base paint.

Include a cost estimate to do the work.

If the remaining existing paint integrity cannot be maintained after
preparation, then the paint must be completely removed (or the surface
recovered with a suitable material such as gypsum wallboard, plywood, or
plaster) before any more refinish work is done.

Include a cost estimate for the repair(s).

***B6.* APPRAISAL EXHIBITS and COPIES**

1.  **PHOTOGRAPHS**

    Each appraisal report requires:

-   one set of original photographs of the subject property showing a
    front and back view (preferably including a different side view in
    each photograph), photos of all major improvements and the street
    scene, and

-   one set of original photographs of each comparable. Only a front
    view of the comparables is required.

> There are two alternatives to submitting original photographs:

-   Computer-generated pictures are acceptable, if they are of
    comparable quality to original photographs.

-   Copies of listing service or advertising pictures are acceptable for
    the comparables, but **not** the subject, if they clearly depict the
    property.

2.  **LOCATION MAP**

    Include the location of the subject property, the comparable sales,
    and the comparable listings (if applicable). Your map (s) should be
    sufficient to allow the reader/reviewer to get to all the properties
    *without additional assistance*. Always use the most detailed maps
    available, such as key maps, city maps or others of sufficient
    detail when possible. For rural properties, county maps are
    acceptable. Show the proximity of significant positive or negative
    factors. If an adequate map cannot be obtained, provide narrative
    directions to subject and comparables.

**3. IMPROVEMENTS SKETCH**

The sketch should show at least the perimeter of the dwelling and
measurements for each side. If the upper level is different from the
first level then draw it separately with measurements. If there is
functional obsolescence from the floor plan, then include the layout in
the sketch.

**4. CERTIFICATION STATEMENT**

Include a completed Certification Statement (FNMA Form 1004B) with each
report.

Additional Certifications which are required State law or by an
appraisal organization which you belong to are also acceptable, provided
that they do not conflict with any VA policy.

***B7.* PREPARING A REPAIR INSPECTION REPORT**

**Timeliness for repair inspections is three (3) business days**. Obtain
a copy of the NOV Letter from the lender to determine the items to be
inspected*. Do not use your appraisal*. In some cases repair items are
modified by us (or the LAPP lender) to better reflect how the repairs or
completion items should be treated. Contact us and/or the LAPP lender if
you have a concern about the required repairs.

All Inspection reports should be completed using your own letterhead.
The format will typically indicate that all (or some but not all)
repairs or completion items are satisfactorily completed. You may charge
for any additional inspections requested.

**In the event you are approved for hold status and will be unavailable
to perform repair inspections, you should arrange to have another VA
appraiser to substitute for you if possible (and vice versa). A message
should be left for requesters (by recorder, etc.) informing them of the
third party with contact information.**

***B8.* SENDING THE APPRAISAL/INSPECTION REPORT**

All appraisals must be in Adobe Acrobat PDF Format and must be submitted
as full and complete appraisal reports, and [must be]{.underline}
electronically submitted to VA's centralized website through the
E-Appraisal application on the Veterans Information Portal (VIP). The
Portal web site is [http://vip.vba.va.gov](http://vip.vba.va.gov/) and
E-Appraisals is located under "Applications". A complete users guide for
E-Appraisals is also available on VIP under the E-Appraisals Application
"Help" button.

E-Appraisal will send an email to the requester that the appraisal
report has been uploaded, however, please cooperate with any requestor
who also asks you to email a copy of your report directly to them in
addition to uploading it to E-Appraisal.

**If for any reason, you are unsuccessful in uploading the report to
E-Appraisal, please immediately email it directly to the requestor, with
a copy to the Houston Regional Loan Center, and to the VA Regional
Office in your area. Then contact the Houston Regional Loan Center at
1-888-232-2571x3117 for assistance.**

In the rare instance in which you are assigned a SLMP case, please be
sure to note that it is "SLMP" on page one of the URAR. (See Section A6
for more information on SLMP cases).

**EXCEPTION:** Those Fee Appraisers who do a yearly average of fewer
than 12 appraisals for VA will not be required (but are encouraged) to
use E-Commerce to transmit their appraisal reports. Appraisers must
apply to the Valuation Officer of the Regional Loan Center for this
exception. **APPRAISERS WHO DO NOT PARTICIPATE IN ECOMMERCE AND ARE
GRANTED THIS EXCEPTION MUST USE AN OVERNIGHT SERVICE TO DELIVER THEIR
APPRAISAL REPORTS TO THE ISSUING PARTY. COPIES MAY BE SENT BY REGULAR
MAIL.**

**[What Must Be Transmitted]{.underline} ?**

Appraisers must furnish their complete appraisal report including all
addenda, certifications, pictures and location maps. **DO NOT SEND the
VA form 26-1805** **(Appraisal Request Form).**

**[What About Proposed Construction Appraisals]{.underline}** **?**

Only the following proposed construction required exhibits will be
electronically transmitted (scanned) when possible with the Fee
Appraiser's appraisal package.

Description of Materials (VA Form 26-1852)

Plot Plan

Foundation Plan

Floor Plan

Exterior Elevations

Typical Wall Section

Appraiser's Certification (regarding proposed construction)

**[What About File Size]{.underline}** **?**

Limiting the file size is important. As a rule of thumb, an existing pdf
appraisal file should not exceed 2000 KB and a proposed pdf appraisal
file should not exceed 3000 KB.

The following information is to assist you in reducing your file size:

a.  Camera Settings

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1.  If your camera has good, better best options for picture quality and
    standard, fine options for resolution, settings need to be
    **better** and **standard.**

2.  If your camera has other options for quality and resolution, select
    the **medium** or **low** setting.

3.  Contact the hardware vendor for any assistance.

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```
b.  Scanner Settings

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```
1.  Be sure that the scanner you own or purchase has the capability of
    100 DPI . This is necessary to ensure your file size remains within
    specified limits.

2.  Most scanner default to Color Photo as the type of scan. This is not
    a viable choice for our purposes. Typically black and white is the
    best setting.

3.  Turn off any automatic features of the scanner.

4.  Contact the hardware vendor for assistance in selecting appropriate
    settings and changing default settings to reflect settings best for
    you.

5.  Most scanned items are acceptable at 100 DPI, maps are the main
    exception. In order to ensure that maps are of an acceptable
    quality, the resolution may need to be higher than 100 DPI. This
    will depend largely on the quality of the original map used in the
    scan.

6.  If you plan on scanning your entire appraisal report and create a
    Portable Document Format (PDF) file, please contact us. We have
    developed a PDF template to make it easier for you.

**2. REPAIR INSPECTION REPORTS**

Inspection Reports should be completed on your letterhead and then
forwarded directly to the lender or sponsor who requested it. Use of a
VA Form is [not]{.underline} permitted. Do not upload repair inspection
reports, or any other correspondence to E-Appraisal. E-Appraisal is
solely for appraisal reports.

***B9.* REVIEWING THE APPRAISAL REPORT**

**1. ORIGINATION REPORTS**

VA or the LAPP staff appraisal reviewer (SAR) will review the appraisal
report for all origination cases. If we do the review, then once
completed we issue a "Notice of Value" (NOV) and forward it to the
lender along with a copy of the appraisal report. If the LAPP SAR
completes the review they will issue a Lender\'s Notification of Value
Letter (NOV or LNOV).

The NOV Letter indicates the final Reasonable Value assigned to the
property, along with the requirements needed to be completed. These
requirements include MPR repair/completion items and other items.

**2. LIQUIDATION REPORTS**

VA, Countrywide or the SLMP Servicer will complete the appraisal review.
Countrywide Home Loans will review the appraisal for foreclosure on all
Portfolio Loan (LPL) cases.

**3. ADDITIONAL INFORMATION**

You may be contacted for clarification or additional information. Any
additional information should be prepared in the most suitable way to
resolve the problem, and mailed or faxed as necessary. In many cases a
brief letter will suffice.

Generally, discuss your report only with the appropriate appraisal
reviewer - either someone in the Construction and Valuation Section at
VA, or the LAPP lender's Staff Appraisal Reviewer (SAR) or the SLMP Loan
Servicer. Refer questions by Loan Officers or Loan Processors (other
than timeliness estimates) to the appropriate SAR. If the appraisal is
"low" then advise them of the appeal process.

***B10.* BILLING FOR APPRAISAL/INSPECTION FEES**

Send the invoice/statement for the appraisal fee to the lender or
sponsor whose address is on the Appraisal Request Form. For Portfolio
Loan (LPL) cases forward your invoice to Countrywide per para. A7.3.

Inspection fees should be collected from the lender/sponsor making the
request. Note that occasionally the origin of the inspection request
(especially the office location) may differ from the office location of
the lender/sponsor who requested the appraisal.

***B11*. APPEALS (RECONSIDERATIONS OF VALUE)**

**1. WHO MAY APPEAL**

Any party involved in the transaction (lender/agent/buyer/seller) may
request an appeal of the appraised value.

The request for appeal and any supplemental information is forwarded to
the assigned appraiser for review. Additional comparable sales and other
market data are not required (it could possibly be asking for the
correction of a mistake such as room count, dwelling size, etc.).
Otherwise, such data is necessary in supporting the reconsideration
request.

Either VA or the LAPP appraisal reviewer will first try to reconcile all
of the information into a final value estimate. Sometimes the data is
field reviewed by VA or the LAPP lender in order to get a clearer
picture of the valuation problem.

LAPP lenders cannot revise the value by more than 5%, but must forward
all data to us for a final decision. The value may or may not be revised
to the amount requested.

**2. ROLE OF THE APPRAISER**

It is appropriate for the lender to contact you directly for assistance.
For example, the value dispute may result from a concern about
inaccurate information in the appraisal report (e.g. incorrect size of
the subject). You can clarify or amend your report if necessary.

The lender may send you the additional comparable sales data for review.
If you determine that the additional sales are not as good as those in
your report, then provide a brief explanation as to why (e.g. sales
farther away/too old/not as similar etc). Otherwise, review the data,
make dollar adjustments on a grid as necessary, and provide a brief
written recommendation regarding the value, consistent with your
analysis of the data. Return your response to the requester

Your recommendations are reviewed by the LAPP lender and VA, and are
subject to change. Therefore, it is highly recommended that you limit
any discussions of the appeal of value to VA staff or the LAPP appraisal
reviewer.

**3. TIMELINESS**

Show the date that the information was received in your office. **The
timeliness requirement for the submission of written responses is seven
(7) calendar days in most instances.**

**4. ADDITIONAL FEES**

Additional fees **are not** allowable if the report is corrected due to
errors, omissions, or when you did not use the best market data. **The
appeal market data must not have been available to you in order to
justify the reconsideration fee of \$100.**

Additional fees **are** allowable if the additional sales submitted for
appeal were settled *after* *the date of the appraisal*. When warranted,
the fee is \$100.

**SECTION C: SPECIAL APPRAISAL PROBLEMS**

***C1*. CONDOMINIUMS**

**1. APPRAISAL REQUESTS**

-   **Origination Reports:** You are required to review the condominium
    common areas. Comment concerning condition and the adequacy of the
    monthly HOA fee. An additional fee is approved for condo appraisals.

-   **Liquidation Reports:** You should receive *only* the appraisal
    request.

**2. APPRAISAL REQUIREMENTS**

-   **All cases:** Use the FNMA 1073 Condominium Appraisal Form.
    Remaining Economic Life should be placed in the lower right corner
    of the " project analysis block".

-   **Origination Reports:** In the "Project Analysis" Section discuss
    what utilities are included in the Condo fee. Also, provide a
    recommended (market) condo fee if the current fee is inadequate.

-   **Liquidation Reports:** In the "Project Analysis" Section provide
    any information that is immediately available to you. Otherwise
    indicate "not available" or "unknown."

**3. COMPARABLE SALES**

-   **New Construction:** Builder sales within the same project are
    acceptable if marketability has been established (i.e. sales
    activity and values clearly established). If used, full closing
    documents must be reviewed and confirmed, and the amount of optional
    equipment identified for potential adjustment to the subject.

If a builder does not wish to provide the full closing data voluntarily,
the fee appraiser should thank him politely, annotate his report to that
effect and find other comparable sales. We cannot accept (the subject)
builder\'s sales data otherwise, except as noted below.

The fee appraiser is not required to *obtain* copies, as an alternative
we will permit these documents to be viewed at the office of the title
company or builder, but the HUD-1 must be verified and reviewed for
several factors, including any indication of excessive concessions.

The sales contract should also be reviewed for options which may require
adjustment, concessions and other factors which may affect the
valuation. This is in the best interests of the builder, who may not
have other means to support the asking price otherwise. We will permit
the use of builder sales without this verification procedure
[only]{.underline} when they appear in MLS, and the transactions follow
the same third party verification process as all the other MLS data we
routinely employ. If sufficient detail does not exist with respect to
optional features or other items, the appraiser may contact the either
listing or selling agent, or the buyer. If these issues cannot be
resolved, the appraiser should find other comparable sales.

-   **Existing Construction:** Sales of other units within the project
    are preferable.

Comparable sales in other competitive projects are also acceptable if an
insufficient

number exist within the project. Such data must be properly analyzed for
items such

as quality and appeal, unit location, project amenities and terms of
sale.

***C2.* INCOME PROPERTIES (2-4 Units)**

Use the FNMA Small Residential Income appraisal form (FNMA Form 1025).
You do not need to provide the Supplemental Income/Expense form.

You must provide the Income Approach to value. The rental figure used
must be realistic (market derived) for the subject property; because
this income may be used to help qualify the Veteran for the loan.
Indicate source(s) of rental information. Use income property sales as
appropriate. Include GRM analysis sheet in the report.

If market conditions are not changing significantly you may provide the
VA Certification concerning listings and contract offerings in lieu of
the listing grid information on page one of the form. (see Section B3 -
neighborhood)

***C3*. PROPOSED CONSTRUCTION (PLANS/SPECS).**

**1. THE APPRAISAL REQUEST PACKAGE**

Lenders and sponsors should send you the appraisal request along with a
set of appraisal exhibits (plans, specs, contract, other) as listed
below. Certified plans should contain all required exhibits, and **all
exhibits should be returned to the requester if they are not
certified**. **You may suspend processing for a maximum of 7 calendar
days in order to receive the certification (or HUD Form 92541, which is
considered equivalent), and please cancel the assignment if this time
frame is not met**. Any delay should be explained in your addendum. If
you receive certified plans which do not contain full exhibits but feel
you have enough to perform the appraisal, then complete your report as
qualified by the omissions.

-   **Appraisal Request:** (VA Form 26-1805)

-   **Contract:** If under contract, a copy of the ratified sales
    contract.

-   **Building Site:** If Vet owns the site (or is buying it separately)
    then review

evidence of purchase and any unpaid balance.

-   **Plot Plan:** Including location of well and septic if applicable.

-   **Description of Materials:** VA Form 26-1852 or other standard
    format. Specify make

    and model of large appliances, heating and hot water equipment, and
    any other special or upgrade items. No "or equals". **Builder and
    Vet both sign the DOM's.**

-   **Building Plans:** Items crossed out that do not apply, and/or
    items identified that do

    apply. Reduced size drawings (no smaller than 8.5 x 11) are
    acceptable, but must be

    clear and readable. Plans must show all exterior elevations,
    foundation and

    basement, floor plans, and sectional wall details.

-   **Plan Certification:** A technically qualified individual (as
    determined by builder) must

include this certification with the construction exhibits:

*"I certify that these construction exhibits meet all local code
requirements and are in substantial conformity with VA Minimum Property
Requirements, including the energy conservation standards of the 1992
CABO Model Energy Code and the requirement for Lead-Free water piping."*

HUD Form 92541 (Builder's Certification of Plans, Specification and
Site) may be

used instead of the above certification.

**2. USING THE PLANS**

The improvements sketch and GLA calculations are taken from the plans*.
In all cases, the plans and specifications as provided are controlling*.
If conflicts are observed between the plans and specs, the specs will
govern. If variances are found between the plans set and any onsite
construction in place, contact us for instructions. If there are
significant differences we will get revised plan sets.

The appraisal is completed subject to completion as indicated by the
Plans and Specifications. Also attach the appraiser certification below.
Upload all appraisal reports to E-Appraisal as previously instructed.
Return hard copy plans and specs to the LAPP lender for LAPP cases, to
us for regular (IND or CRV) cases.

**3. ADDITIONAL CERTIFICATION**

**Provide the following additional certification with your appraisal for
proposed**[:]{.underline}

***\"I hereby certify that the information contained in the exhibits
identified herein was used to arrive at the estimate of reasonable value
noted in this report.\"***

Identify the
Plans\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Signature

For MCRVs, you will receive additional instructions for your narrative
report.

***C4.* LIQUIDATION / DEFAULT CASES**

**1. INSPECTING OCCUPIED PROPERTIES**

The required timeliness is 7 calendar days from receipt of assignment.
You must make up to three reasonable attempts to gain entry, unless
access is gained on the first or second attempt. Attempts can include
telephone calls to the owner and personal visits to the property. Your
attempts should be done at various times to allow a reasonable chance of
finding the owner or occupant at home. Our best hope of entering
occupied properties under this timeliness requirement lies in obtaining
a working telephone number for the current owner. If a working number is
not provided, contact the requester by phone, email or fax. Try the
phone book, then you may contact our Loan Administration Section at
1-888-232-2571 ext. 5. Inform them that you are a VA fee appraiser
without a working phone number for the owner of record. You will receive
a reply immediately or a return call, hopefully the next day (which we
cannot guarantee). Otherwise, once you visit the subject, please leave
your business card with a note explaining that you are conducting an
appraisal for VA and need to enter the dwelling, but can delay for only
one additional day. You must document all contacts & dates and attempts
on page 2 of the URAR in the box immediately to the right of the cost
approach section.

When the property is occupied, you can do an "exterior only" appraisal
if:

-   You have been refused entry by the owner or occupants; or,

-   Access is considered by you to present a hazard; or

-   You have made at least one appointment, which has been broken; or

-   Three or more contacts with occupants at the number(s) provided with
    the liquidation

appraisal request have resulted in no access.

When interior access is not gained, make reasonable efforts to verify
what the interior of the property is like. Make reasonable assumptions
based on the exterior condition, MLS listings, or other information
about the interior once all other means of verification have been
exhausted.

**2. INSPECTING VACANT PROPERTIES**

Once you determine that a property is vacant ***and abandoned***, notify
the requester by telephone to properly secure the property and to
provide you with a key or other means of access. **You must then
immediately email or fax the Houston RLC, informing us that your
appraisal will be delayed until entry is gained, and confirming that the
requester has been notified. You will be held responsible for the delay
unless we receive this notification promptly!**

**You *must* gain interior access for vacant dwellings** (unless local
laws prevent this). Since some delay is likely*, **there is no time
limit on the completion of the appraisal*** **unless we contact you
directly to provide a report** (even if you did not gain entry).

**3. SPECIAL INTERIOR INSPECTION CASES**

If the Liquidation appraisal request indicates that the case is a "VA
Refunding" or a "Compromise Sale" or a "Deed in Lieu of Foreclosure",
then *you must gain interior access, whether vacant or not.* The
Veteran/owner should be cooperative, as he or she is notified that you
must be granted interior access. These Appraisals are commonly called
**SLMP** type appraisals.

**4. APPRAISAL REQUIREMENTS**

*Foreclosure properties are always appraised \"as-is\",* even if MPR
and/or cosmetic repairs are needed. In all cases provide market value,
not \"quick sale\" value or any other type of value.

To the extent appropriate, select comparable data that represents
typical market transactions. Even if the subject property needs
significant repairs, a sale in the immediate area but in better
condition may (after adjustments) be a better indicator of value than a
sale from a different area that also needs repairs.

**5: ADDENDUM INFORMATION**

Include the following supplemental information with your report. You
**must** use the format as shown in addenda 1 and 2 attached to this
manual.

-   Evidence of at least three reasonable attempts to gain entry (not
    needed if access

gained but clearly state that you gained entry). This includes date,
time, phone (or

personal visit), name of contact, and comments as appropriate. Include
lender

contacts when appropriate.

-   State whether the property is vacant or occupied, and if secured or
    not.

-   If tenant occupied, then to the extent possible provide the
    occupant\'s name and any rental information the tenant(s) will
    provide you (such as period of occupancy, lease terms and expiration
    date, monthly rental and when due, and to whom payable).

-   An itemized list of repairs (both MPR and non-MPR/cosmetic), plus an
    estimated

cost to complete each item and **the contributory value added.**

-   Advise if any emergency repairs are required to safeguard the safety
    / security of the dwelling. Advise your best estimate of the needed
    repairs to make the subject marketable.

-   Insure that there is a logical analysis of the Cost / Contributory
    Value and that the contributory value relates to the Adjustment
    shown for "Condition" on the appraisal.

-   MPR items, if any, are always required to be listed. Non-MPR
    (cosmetic) items are

based upon your opinion of any other work which, if completed, would
bring the

property up to at least the typical neighborhood standard.

-   In some cases, the market may dictate that you first need to "lump
    together" some

repair items to get a total single contributory value. Remember that
cost does not

always equal value.

-   **List separately any emergency repairs required**, such as repairs
    necessary to

protect the property from vandalism or cold weather, or immediate
repairs

needed to correct major problems (flooded basement, roof/plumbing leaks
etc*.).*

*If major problems exist then contact the RLC.*

-   **Provide an analysis of at least three competitive listings or
    pending contracts**.

> Fee appraisers are required to submit an addendum containing no less
> than three competitive listings or verifiable contract offerings
> considering the most similar and proximate to the subject property
> with all liquidation appraisal reports.
>
> This data should include all the type of information usually found in
> an MLS entry or other listing. You must also report the total time
> listed, any known changes to the listing price of each property, and a
> short statement comparing these properties to the subject.

-   Contract offerings are more desirable than listings. New
    construction contracts must clearly identify every optional item and
    variation from the basic house type and any sales/financing
    concession included in the sales price.

-   As a minimum, the data must include:

Property address, and proximity to the subject (distance and direction)

Design/style, room count and gross living area, and age

> Current price (or contract amount, if available), price changes since
> listed, and days on the market (DOM)

Comments as to how the property compares to the subject. *Your analysis*

*should be sufficient to show that the listing or pending sale is either
superior,*

*similar or inferior to the subject.*

You may provide this data in the form of an MLS printout, supplemented
by

comments on any remaining information that is required above. Or, you
may

instead choose to \"grid\" the listing or pending sale data (in a manner
similar to

relocation appraisals) and then comment on the remaining information.

If you are using a pending contract on a new house, identify all options
and other

variations from the base model.

It is possible that listings may provide a better indication of current
prices than

settled sales*. This is especially true for declining markets,* where
listings may be

offered at lower prices than recent similar sales*.* If you determine
that this is the

case, then your final value estimate must reflect the influence of
current listings,

and not just the value indicated by the settled sales.

-   Any supplemental comments not included elsewhere in the appraisal
    report.

There is a sample template of a Listings/Contract Offering Addendum at
the rear of this guide, and further information may be obtained from the
Lender's Handbook, VA Pamphlet 26-7, which contains a Liquidation
Appraisal Addendum Example, idendtified as Figure 1 on page 11-28 of
Chapter 11. The website for VA Pamphlet 26-7 is
<http://www.homeloans.va.gov/handbook.htm>.

Questions concerning this procedure should be addressed to a staff
appraiser at 1-888-232-2571, x3117.

**6. THE DEPARTURE PROVISION**

All USPAP and VA appraisal guidelines apply, except when you cannot
inspect the interior.

When you complete the appraisal without doing an interior inspection,
you may indicate Departure by amending the Certification page, Item 8
(delete the words..\"interior and\".. and put your initials adjacent *if
possible*, otherwise note in your addendum).

***C5.* MANUFACTURED *(*MOBILE) HOMES**

**1. ELIGIBILITY FOR APPRAISAL**

Mobile Homes are eligible for appraisal and long-term VA financing,
provided that:

-   The improvements must constitute *real property* (improved real
    estate) and not chattel. You may verify with the local authority
    having property tax jurisdiction

(typically the county) the manner in which the improvements are assessed
(i.e. real

or personal property). If so, remember that the unit may have been
recently affixed,

and the taxing authority not reflect the current assessment.

-   The location of the Mobile Home on the lot is not a violation of
    zoning laws or other

local requirements.

**2. EXISTING M.H. CONSTRUCTION**

The property is considered as existing if the Modular (or Mobile) Home
is on site and adequately affixed to a permanent foundation.

The foundation must be acceptable to the building authority having
jurisdiction and must be constructed to withstand support loads and wind
loads. **You must fully describe, and photograph the foundation to
illustrate the type of foundation and the manner affixed**. Examples of
acceptable foundations are a slab with piers for beam attachment, 30
inch diameter piers no less than eight feet on center (or apart),
perimeter beams or runners. Other methods may be acceptable. If you have
questions about the acceptability of the foundation or attachment method
(especially if there are no local requirements) you may contact the
Houston RLC.

Existing Mobile Homes are appraised in the same manner as for other
Existing Construction, subject to VA MPR's. (see Section A4)

**3. PROPOSED MOBILE HOME CONSTRUCTION**

The property is Proposed Construction if either the foundation is
incomplete or the unit has not yet been installed. *The Mobile Home can
be new or used*.

The foundation must be acceptable in the same manner as for Existing
M.H. Construction (above).

Proposed M.H. Construction cases are appraised from the use of a limited
plan set which shows the floor plan of the unit and the foundation
detail. Plans are forwarded to you with the appraisal request. Plans
should include a site plan and specification sheet.

The appraisal is subject to VA MPR's for Proposed Construction. (see
Section A4)

The Proposed Construction Certification applies for exhibits. (see
Section C3)

**4. APPRAISAL ANALYSIS**

**Indicate that the mobile home is on a permanent foundation, describe
and photograph the method affixed. This may require the removal of some
skirting if an adequate view is not available. If so, you may delay your
report for a maximum of 7 calendar days for regular cases (VA CRV), or
30 days for LAPP cases.**

Give careful consideration to the remaining economic life (REL) of the
improvements. Mobile Homes typically do not have the life expectancy of
other housing types*. Clarify or explain when the REL is less than 30
years. When the REL is less than 30 years, the loan term is reduced to
the same period.*

Provide the make, model, serial number, length, width, and square
footage of the manufactured unit, if available.

***C6.*** **SPECIAL PROPERTY PROBLEMS**

**1. AIRPORTS**

When a property is near an airport, the property may or may not be
eligible for appraisal depending on the *Noise Zone.* Identify and
report the Noise Zone where the property is located. The appraisal must
include a consideration of the value impact of the proximity to the
airport. Comparable sales must reflect market acceptance of the
neighborhood.

**Airport Noise Zones**

+---------+-----------------+--------------------+--------------------+
| **      | **CNR           | **NEF (Noise**     | **DNL (Day/Night   |
| Noise** | (Composite      |                    | Ave Sound Level)** |
|         | Noise Rating)** | **Exposure         |                    |
| *       |                 | Forecast)**        |                    |
| *Zone** |                 |                    |                    |
+---------+-----------------+--------------------+--------------------+
| 1       | Under 100       | Under 30           | Under 65           |
+---------+-----------------+--------------------+--------------------+
| 2       | 100-115         | 30-40              | 65-75              |
+---------+-----------------+--------------------+--------------------+
| 3       | Over 115        | Over 40            | Over 75            |
+---------+-----------------+--------------------+--------------------+
| Clear   | At end of       |                    |                    |
|         | runway          |                    |                    |
+---------+-----------------+--------------------+--------------------+
| A       | Beyond the      |                    |                    |
| ccident | Clear Zone      |                    |                    |
| Po      |                 |                    |                    |
| tential |                 |                    |                    |
+---------+-----------------+--------------------+--------------------+

**Zone 1:** All properties (Existing/New/Proposed) are eligible.

**Zone 2:** Existing and New Construction properties are eligible.
Proposed Construction

is eligible provided that Sound Attenuation features are built into the
dwelling

so that the *DNL Sound Level is 45 decibels or less;* contact us if you
cannot

determine this from the plans or other information provided.

**Zone 3:** Existing and New Construction properties are eligible.
Proposed Construction

is not eligible unless the project was first accepted by VA and then the
Noise

Zone contours were subsequently changed, in which case Zone 2 applies.

**Clear:** Existing and New Construction properties are eligible.
Proposed Construction

is not eligible.

**Accident Potential:** Existing and New Construction properties are
eligible. Proposed

Construction is eligible *if the project is consistent with the
recommendations*

*of the airport's Air Installation Compatible Use Zone (AICUZ) Report*.
We have

AICUZ information on file at this office. Contact us if you need it.

Appraisers must report the noise zone and DNL for the subject property
in the site section of the URAR. If the property is not in a noise zone,
so state.

**2. APPLIANCES AND OTHER REMOVABLE EQUIPMENT**

Equipment items which are suitably attached and which contribute to
livability are acceptable for valuation. Such items typically include
built-in household appliances.

Items which are generally considered to be personal cannot be included
for valuation. Personal items typically include blenders, mixers,
furniture, loose rugs and drapes, satellite dishes, and above-ground
pools.

Local custom dictates that some items will require your judgment, such
as wall or window air conditioning units, and light fixtures. As a
guide, note the manner in which the item is attached to the dwelling.

Also, you can use the purchase contract and/or the appraisal request as
a guide to determine what is being purchased.

**3. COASTAL BARRIER RESOURCES SYSTEM**

The CBRS are used to identify areas of land that are subject to
significant problems caused by proximity to water (Texas & Louisiana
coastal counties).

When applicable, determine if the property is located in an affected
area (included within the solid heavy black lines on the maps). If so
then you must reject the property outright.

You can obtain maps by contacting the U. S. Geological Survey,
Distribution Branch, Open Files Services Section, Box 25425, Denver CO.
80225

**4.** **COMMERCIAL/RESIDENTIAL COMBINATIONS**

Reject the property if the commercial use exceeds 25% of the total floor
area. Otherwise, describe and analyze the condition. Your report should
include zoning information and a description of the use of adjoining
properties. Photos should include commercial uses if in immediate area.
Indicate both commercial and residential square footage.

**5. COMMON/PARTY WALLS AND ZERO LOT LINES**

If a property has a common wall with an adjoining property report this
condition. If the dwelling is constructed at or near the lot line, then
report this condition along with a recommendation, if necessary,
regarding the need for an access easement (to allow for maintenance and
repair to the subject exterior). Each living unit must be capable of
individual maintenance and must be accessible without trespass.

**6. CONTRACT REPAIRS**

If there are MPR repair items in the purchase contract (particularly for
new dwellings complete to the customer preference), such as floor
covering and appliances you should require that they be completed. This
is the case if (a) the items are described adequately and (b) *they have
impact on the appraised value*.

For example, you may review a purchase contract which requires that the
seller install new carpet prior to settlement, and conclude that new
carpet is an MPR repair item due to an unsanitary condition (dirty),
unsafe or unsound (torn, which could result in tripping) particularly
since the principals have agreed it is unsatisfactory. The property
value is impacted by the new carpet.

*You may complete your appraisal report "subject to" the completion of
those contract repair items you award value to in your report.* List
*separately* as contract items, along with an estimated cost to complete
each item. A completion inspection may be required.

7.  **EXCESS LAND**

There is no limit on overall land or site size as long as the whole
parcel is contiguous. See Farm Residences below.

8.  **FARM PROPERTY**

Although VA does not make farm or other business loans, the law allows
veterans to use their Loan Guaranty benefit to purchase a farm on which
there is a farm residence.

The appraisal of properties with acreage should not present difficulties
if a sufficient number of similar properties in the area were recently
sold primarily for residential use. For VA purposes, the valuation must
not include livestock, crops or farm equipment and supplies.

Installed facilities (such as, well and septic tank, etc.) serving the
dwelling will be considered part of the dwelling when, in the opinion of
the appraiser, such items contribute to the desirability and residential
aspects of the property.

**Buildings other than the dwelling will be valued on the basis of the
use of the property for residential purposes only. Barns, silos,
stables, livestock fencing or other improvements do not contribute to
the residential character, and no value will be awarded.**

**9. FLOOD ZONES**

-   **Existing Construction:** Denote which Flood Zone (A, B, C) in
    which the *improvements* are located. If you are not sure, comment
    in your appraisal report about the problem so that the lender may
    obtain a formal flood zone review. Otherwise, provide the zone, map
    reference number and map date in the Site Section of the appraisal
    form being used. If there is no Flood Map then so state.

-   **New and Proposed Construction:** Do the same as above, unless you
    determine

that the lowest floor is below the base Flood Level (Zone "A"); if so
then clearly

indicate this condition in your appraisal report.

-   **Any property** subject to regular flooding (regardless of Flood
    Map data) or in Zone "A" or "V" where no flood insurance is
    available must be rejected.

a.  Include only those areas which are in the 100-year flood plain as
    delineated by FEMA (Federal Emergency Management Agency) on flood
    maps developed through engineering studies; usually refined into
    Zones A, A0, AH, AE, A99, VO, VE or V. (Older maps utilize numbered
    A Zones; e.g., A1, A2, A30 and numbered V Zones; e.g., V1, V2, V30.)
    Flood insurance is not required in Zones B, C, X and D.

**10. FLUCTUATING MARKETS (CONSTRUCTION COSTS)**

Changes (increases) in costs do not necessarily result in changes in
market value, since the market typically does not buy properties based
only on a property\'s reproduction or replacement cost. *Market
adjustments to comparable sales must be based on the market reaction to
the condition*, and not (based) on the cost changes alone.

**11. HIGH PRESSURE GAS/LIQUID PETROLEUM TRANSMISSION**

**LINES and HIGH VOLTAGE ELECTRIC TRANSMISSION LINES**

A property is eligible for appraisal when the dwelling is *not* situated
in the high voltage electric transmission line easement area. Other
improvements may be within the easement, but will receive no value.
These determinations are generally made once the lender obtains a
survey, but you should report the existence of such transmission lines,
and a locational adjustment may be warranted to the subject property.

For High Pressure Gas and LP Pipelines, the dwelling may not be situated
within the easement. Other improvements may be within the easement, but
will not receive value. For proposed construction, if the house and
attachments will be located outside of the easement area but within a
distance of 220 yards of the centerline of the transmission line,
disclose this in your appraisal report. Additional conditions are
required by VA that must be cleared by the lender prior to loan
guaranty.

**12. PARTIAL RELEASES**

We will send you a letter of request for an appraisal, along with a
survey and/or plat maps indicating the portion(s) of the property to be
severed. Your report should include the value of the whole property
before ("As-Is") the release, a value of the property after the
"taking", the value of the portion released, plus estimating any damages
to the residue as a result following this release.

**13. RENOVATIONS and REMODELING**

Some alterations (such as a new enclosed porch under construction on a
resale property) may require that you review plans and specifications,
or contractor bid proposal, or some other accurate listing of the
changes to be made.

If you discover this problem then contact us. We will obtain the
information needed and forward it to you. Prepare the appraisal "subject
to" the information we provide you. When such modifications exceed
\$3500 in cost, you must provide both an \"as-is\" and an
\"as-completed\" value.

**14. UNVENTED SPACE HEATERS OR FIREPLACE**

Provide detailed comments on Unvented Space Heaters that use liquid or
gaseous fuel, or any Unvented Fireplace. There are additional
requirements (not part of the appraisal) that must be added to the Value
Notice by VA or the LAPP Lender.

**SECTION D: MASTER COMMITTEE APPRAISALS**

**and**

**MASTER CERTIFICATES OF REASONABLE VALUE**

**(MCRV\'S)**

**1. WHAT A MASTER COMMITTEE APPRAISAL IS**

A Master Committee appraisal report is one where the values apply to
more than one property in a new development.

You provide an appraisal report for each model based on the typical
(base or lowest) lot value, a value for the individual site premiums (if
any) and values for the unit options. When a unit goes under contract,
all of the predetermined individual values (model+site premium+options)
are totaled to determine the maximum value of that property for VA.

The Master Appraisal is usually completed based upon Plans and
Specifications (Proposed Construction). On rare occasions, we may ask
you to prepare a report on a Condominium Conversion project (as existing
construction) where full plans are not necessary.

**2. THE APPRAISAL ASSIGNMENT**

MCRV assignments are not subject to an "automatic" rotation of
appraisers. We attempt to rotate them on a case by case basis from a
smaller pool of appraisers. This is because:

-   Not every appraiser on our roster is interested in performing this
    kind of work, and

-   Of the remainder, we select only from those appraisers whose quality
    of work and

turnaround time are exemplary.

Depending upon the number of lots and model types, we may assign more
than one appraiser to help complete the report. We do this when the
builder wants to try to sell a large number of units (typically over
100) in a given year or season. Values can be critical when the builder
wants to do volume sales.

If more than one appraiser is needed, then one of you will be designated
the *Chairman* (of the Committee) and will be responsible for completion
of the final appraisal report. The fee is adjusted (for two appraisers)
accordingly, per below.

**3. EXHIBITS USED**

All of the information needed to complete a Master Committee report is
sent to you by the requester with additional instructions from VA.
Review all of the exhibits for completeness, including:

-   A letter containing Building Program Information, which includes the
    total units to be built, total units in the phase under
    construction, and start/completion dates. Other information includes
    Public Works provisions and any special assessments.

-   An appraisal request form for each basic model.

-   Plans and specifications for each model type. If plan sets are
    reduced size then they

    should be clear and legible. Plans must show all exterior
    elevations,

    foundation and basement, floor plans, and sectional wall details.

    Specifications will show make/model for large appliances and heating
    and hot

    water equipment for each base model.

-   Site Plats (or Condo unit plats) locating each site or unit will be
    included.

-   A worksheet set (VA Form 26-1843b) which includes a complete listing
    of all of the

    individual models, lots and options to be valued.

-   If Modular Construction, evidence of coverage by a HUD Structural
    Engineering Bulletin or a certification of approval by the state in
    which the unit is fabricated.

-   If Condominium, a set of Organizational Documents for your review.

**4. REVIEWING THE PLAN SETS and FIELD WORK**

Complete your review of the exhibits and your onsite inspection. Check
for any discrepancy between the plans sets and information obtained on
site.

One possible problem might be that the \"show\" models as built might
not agree with what the plans indicate is to be built. A more common
problem is when the base model(s) from the plans don\'t agree with the
base model(s) as described in the builder\'s *Sales/Marketing
Information* (for example, 1 bath standard Vs 2, or other discrepancies
in standard Vs optional items). If this happens then contact us for
assistance.

You will need to become familiar with other projects to determine
competing marketing conditions. If marketability of the subject project
has not yet been established (i.e. the project is just opening up for
the first time and sales are limited), you *must* review other competing
projects for sales data. Your field work should be sufficient to allow
you to:

-   Prepare an individual appraisal on each model type, and to

-   Provide a value for each lot, site premium and option, and to

-   Prepare a narrative report which includes the information described
    below.

**5. ESTABLISHING THE VALUES**

-   **Model Types:** Provide an appraisal for each model type, using the
    guidelines for Individual Proposed Construction. (see Section C3)

Include only the standard features for the "base" model, and a typical
"base" site

value. Deduct the value of options contained in the Comparable Sales.

For apartment-style condominiums use the \"benchmark\" model (the least
favorable

location in the project) as a base for each model type.

Include the appraisal certification (regarding the exhibits used) for
Individual

Proposed Construction appraisals, *unless the units are condominiums.*
For

Proposed Condominium appraisals include the following certification*:*

*"I hereby certify that the information contained in the plans,
specifications*

*and all condominium organizational documents have been employed in*

*arriving at the estimate of reasonable value noted in the appraisal
report."*

For Condominium Conversion Projects see also below.

Once the appraisals are completed, put the value of each base model on
the appropriate VA worksheet page (containing information on the
standard models) under column 9, \"Appraised Value\".

-   **Individual Sites:** On the VA worksheets (where the individual
    sites are listed) indicate the market value for the base site. You
    only need to indicate the base value *once,* on the first page of
    individual site listings (under \"Appraised Value\" Column 10). You
    may omit this process for apartment-style condominiums.

*You do not need to provide an individual site appraisal*, but your base
site value on

the worksheet should be consistent with that shown on the URAR (in the
Cost

Approach section).

The VA worksheets may also specify lots requiring a site premium (such
as for view

site or woods at rear). Based upon your project inspection, adjust the
worksheets to

specify those sites that in your opinion deserve a premium, *regardless
of what was*

*requested*. You may adjust the value (dollar) amount up or down, or
give no value at

all. Put the adjusted site value (if any) in column 10 of the VA
worksheet for each

applicable site. If the premium is requested as an "option", then show
the value

amount in column 17 and specify as necessary which sites are eligible.
For

apartment-style condominiums, the value difference for each level (if
any) is usually

considered as a unit option and not a site premium.

-   **Unit Options:** On the VA worksheets, review all of the individual
    buyer options and establish a market value for each item. If, in
    your opinion, the item does not contribute any additional value to
    the property than indicate "no value" or NV. Put your value in
    column 17 of the worksheet.

You may use a Cost Service Manual as a guide, but any value should be
based upon

all available market-derived information, such as data from other
builders and local

store prices.

The VA worksheet set is now completed. Please initial and date each
page.

**6. THE NARRATIVE SUPPLEMENT**

You must provide a Narrative Supplement in addition to the completed VA
worksheets and the individual appraisal reports. If necessary, provide
extra photographs to help explain or show pertinent factors. Include a
discussion of:

-   **The market area.** If not already on the individual appraisal
    report(s) then discuss

    availability of amenities (schools, churches, shopping, employment,
    recreation and

    transportation), plus other relevant economic factors.

-   **The project.** Include development stage, estimated completion,
    sales history, onsite and offsite improvements, overall conformity,
    market appeal.

-   **The project site.** Include topography, utilities, zoning and
    restrictions. Also denote

    other influences or hazards such as flooding, aircraft noise,
    traffic and other

    conditions.

-   **Competing projects.** Include styles, price ranges, total units
    and absorption rates.

-   **Individual Site Values.** Fully explain your methodology for
    estimating individual site values and provide adjusted land sales.

-   **Amendments or corrections.** Discuss any changes or corrections
    you made to the

    Worksheets. For example, if you adjusted the sites which are to
    receive a premium

    then briefly discuss why. If you adjusted a standard item to an
    option (or vice versa)

    then mention why.

-   **Relationship to Master HOA/PUD:** If applicable, then comment on
    the master HOA

    development and status, the common area, the required fees, and the
    impact of the

    organizational documents (if any).

-   **Relationship to Master Condominium Regime:** If applicable then
    review the

organizational documents and provide a *Project Review.* Include your
analysis of the

proposed budget, monthly assessment(s), and the percent ownership
interests.

Inspect common areas and comment concerning their condition. You receive
an

additional \$50 fee for this review.

**7. CONDOMINIUM CONVERSION PROJECTS**

For purposes of simplicity and uniformity, we usually require that the
developer refurbish or renovate each unit and building to a minimum
common standard. Once a base standard is established, the units and
other options and upgrades can be appraised.

To the extent applicable, we will send you the documentation described
above. We will also send you architectural and/or engineering statements
concerning the relative condition of most of the major components of
each building (structure, roof, elevators, heating and cooling, plumbing
and electrical).

In conjunction with the above directions, explain in the Narrative
Supplement what conversion work is to be done.

In the Condominium Project Review, discuss the adequacy of the condo fee
and the budget and operating reserves relative to the condition of the
project. For example, a low condominium fee (and/or low budget reserves)
may be inadequate if only minor cosmetic work is being done in the
project while other deferred maintenance still remains. Use the same
certification as for Existing Condominiums. (Section C1)

*Note that* t*here is most likely a significant value difference between
units that are renovated and units that are just cosmetically
refurbished.* Your report and analysis should reflect this.

**8. THE COMPLETED MASTER REPORT**

Your completed Master Report should consist of an individual appraisal
report for each model (one original/one copy), a Narrative Summary (one
original), the completed VA Worksheets (one set) and the Condominium
Project Review if applicable.

Sign and date the Organizational Documents set (if we sent them to you)
on the inside front cover. Send your Master Report to VA only, along
with any Organizational Documents.

If you need a set of the Condominium Documents we will make a copy set
for you. *Keep one set of the plans and other exhibits for your files*.

Do not discuss your Master Report with the lender or sponsor, because
upon review we may amend the Report. Once our review is complete we will
issue a Master Certificate of Reasonable Value (MCRV) which contains all
of the final values for the units, sites and options, plus the
requirements and conditions which the lender has to fulfill for Loan
Guaranty purposes.

We then forward the MCRV to the lender or sponsor, along with a copy of
your appraisal for each model type.

**9. VALUE APPEALS**

Any disputes or requests for reconsideration of value must be submitted
to the fee appraiser first. These appeals may be supported by unsettled
sales, or legitimate contracts which reflect market acceptance of price
increases. Appeals of value for the model types are usually resolved in
the same way as for individual appraisals otherwise. Appeals of the
option values are usually resolved by VA, although we may contact you
for assistance.

**10. CONSTRUCTION INSPECTIONS**

We do not assign appraisers to do interim or final inspections for MCRV
projects. We assign regular VA Compliance Inspectors for this purpose.
Their role is not only to determine if the unit is completed, *but done
so in accordance with local code, VA MPRs for proposed construction, and
the plans and specifications used to establish the appraised values.*

**11. THE APPRAISAL FEE**

See the appropriate fee schedule by state

**SECTION E: ADDITIONAL INFORMATION**

**AND ADDENDUMS**

**QUALITY RECOMMENDATIONS** :

-   In the present climate of higher appraisal standards and licensing
    of real estate appraisers, VA will continue to support fee
    appraisers in a positive way to promote quality reporting.

**SOME SUGGESTIONS TO ACCOMPLISH THIS GOAL :**

-   **Comparable Sales -** Sale data should be as current as possible
    and located in the same marketing area (subdivision if possible). If
    older than 12 month data must be used, please explain its use. Use
    the full address of sales; if a rural route, give the owners name,
    state road number.

-   **Manufactured Housing** - If conventional housing units are used as
    comparable sales, an adjustment under "Design and Appeal" is usually
    warranted.

-   **Property Inspection** - If existing property shows evidence of
    damage from termites, dry rot, dampness, or settlement, you must
    detail the extent of the damage and give your opinion if a specific
    repair can correct the damage or if the damage should be assessed by
    a professional engineer or VA staff member. Also, let us know if you
    believe it is not economically feasible to correct the deficiencies.
    Be sure to inspect crawl space with a flashlight for excessive
    dampness, adequate ventilation, structural soundness or other
    damage. Please state in your report if there in no access to the
    crawl space and require access as a repair item.

-   **Repairs** - Review repair lists closely to assure that only those
    items needed to meet the Minimum Property Requirements (MPR) for
    existing construction are reported and a cost estimated for each
    item. Some repair lists are too lengthy and include cosmetic type
    repairs and other requirements for certifications and special
    inspections. Test your repair list. Are they limited to items of
    safety, structural soundness, and habitability. Remember that if MPR
    repairs are required, your grid adjustment for condition must
    reflect the "as repaired" condition.

-   **Legal Description -** Every appraisal must contain a positive
    identification of the property being appraised. An accurate legal
    description of the property must be obtained from the deed, mortgage
    or other land record sources in the community. It may be attached as
    an addenda sheet.

-   **Economic Life -** Report a realistic estimate of the number of
    years of remaining utility of the main dwelling for residential
    purposes. If you report a remaining economic life less than 30
    years, your report should clearly indicate the reason for the
    reduction.

-   **Functional Obsolescence** - Be careful to consider functional
    utility problems in light of the market and indicate acceptance or
    rejection of the dis-utility ; for example, a poor room arrangement.
    Annotate your sketch of the floor plan when functional obsolescence
    is applicable.

-   **Timeliness** -All appraisals now have a 7 calendar day timeliness
    requirement. If you experience access delays, include a prominent
    note in your appraisal stating the number of days you were delayed
    access to the property. VA appraisal assignments are to be completed
    with the same timeliness as conventional appraisals.

-   **Market Approach to Value** - Do not use cost data to make dollar
    adjustments in the market approach to value. Adjustments or value
    indicators should be rounded to the nearest \$100, the real estate
    market is not that exact. If repairs are required to bring the
    property up to minimum property requirements for existing
    construction, then the condition adjustment must be "as repaired" to
    indicate an "as repaired" value.

-   **Proposed Construction** - It is essential that special care is
    taken in the selection of comparable sales, especially since only
    the market approach is required and new construction sales may be
    limited. Use of older sales usually require adjustments which are
    large. If good comparables are not available, it may be helpful to
    use the cost approach to give additional support to a questionable
    market approach. Specifically describe the exhibits used to arrive
    at the Value Conclusion . "Used plans & specifications", "Used the
    enclosed" and "Used what was available" is NOT acceptable.

-   **Liquidation Appraisals** - Advise if any emergency repairs are
    required to safeguard the safety / security of the dwelling. Advise
    your best estimate of the needed repairs to make the subject
    marketable.

-   **Cost / Contributory Value** Insure that there is a logical
    analysis of the cost / contributory value and that it relates to the
    adjustment shown for "condition" on the appraisal.

-   **Like Properties** Compare apples to apples" i.e. Colonial to
    Colonial, Ranch to Ranch, 3BR to 3BR etc.

-   **Descriptions** The use of such terms as "typical" "average"
    "equivalent" is discouraged. Describe the item.

-   **External Obsolescence** If subject is in Noise Zone, Aircraft
    Crash Zone, or FEMA Flood Zone do not make the following comment:
    "No external obsolescence observed."

-   **Public Relations** - Many of the complaints we get about
    appraisers do not concern low values. They relate directly to what
    the appraiser says and does when viewing the subject property. Do
    not rush, many complaints deal with brief inspection times of less
    than 30 minutes. A person's home or prospective home is a sensitive
    topic and thus care should be taken in what we say and do. A
    professional, courteous appearance and demeanor will help instill
    confidence with the public that an objective appraisal will be made.

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-   **Ecommerce submissions-** If for any reason you are unable to
    upload your appraisal to the VA Eappraisal system, you should
    transmit your report immediately via email to the requestor, and to
    the Houston Regional Loan Center, and the appropriate VA Regional
    Office**.** When you address your e-mail message, you **MUST** place
    the **full VA case number** in the SUBJECT block as the 12 digit
    case number, **followed by the appraisal type** (LAPP, CRV or LIQ),
    **and your last name:** Example**: SUBJECT:
    62-62-6-0999999/LAPP/SmithW**

> **Advise VA immediately of a fax, email or street address change!**
>
> **Hold Status- You must request hold status no less than 7 calendar
> days in advance by fax to the RLC at (713) 794-3813 or email, and you
> must have completed all pending VA appraisal assignments prior to
> departing** (unless a medical emergency). Medical emergencies cannot
> be anticipated, but someone must notify VA ASAP (office personnel,
> spouse, friend, etc.). We will reassign your case work, and please
> refer to page 35 concerning the "buddy system" for repair inspections
> which you cannot anticipate. **If you depart for vacation without
> notifying VA, you are subject to an immediate administrative sanction
> following your return. A second violation may be dealt with by
> removal!**
>
> **C&V MEMOS-** It has come to our attention that all C&V Memos emailed
> to fee appraisers since our regionalization have not been received. We
> encourage all fee appraisers to visit our website at
> <http://www.vba.va.gov/houstonrlc.htm>, **under Current Local
> Bulletins**; **C&V Memos** (at the bottom of the page)**.** Please
> review and print all C&V Memos and visit this site periodically. We
> plan to continue to convey C&V Memos by email, so please **advise VA
> immediately of email address changes.**

**[ABBREVIATIONS]{.underline}**

A/C Air Conditioned EBB Electric Baseboard

ALM Aluminum EFWA Electric Force Warm Air

A/D/H Alum/ Double / Hung HDWD Hardwood

APT Apartment HP Heat Pump

Aprx Approximately Incl Included

ASPH Asphalt Ind. Industrial

ASUM Assumption Irr Irregular

Atch Attached Kpp Knotty Pine Panelled

AWN Awning Window Ldscp Landscape

BSMT Basement Lge Large

BLK Block L & P Lathe & Plaster

BRK Brick Lvl Level

B / I Built In Min Minimum

Cab Cabinet Mod Modern

CAC Central Air Conditioned Mtg Mortgage

CPT Carpet Neigh Neighborhood

C/P Carport N / I Not Included

C1A Carport 1 attached NV No Value

C2A Carport 2 attached OFF Oil Floor Furnace

C1D Carport 1 detached OFHW Oil Force Hot Water

C2D Carport 2 detached OH Over Hang

CIV Considered In Value OSH Oil Space Heater

C / L Center Line OWF Oil Wall Furnace

C / T Ceramic Tile OSS Outside Storage

COL Colonial Pnl Panelled

COMB Combination Parq Parquet

COMM Commercial Pymt Payment

Conc Concrete Prch Porch

Cond Condition PITI Principal Interest Taxes

Insurance

Condo Condominium P / L Property Line

Const Construction PP Personal Property

Cont. Contemporary PUD Planned Unit Development

Conv. Conventional Rec Recreation

Cov. Covered Res Residential

CUL Cul - de- sac RM Room

CSMT Casement Windows ROG Room Over Garage

DCK Deck RH Raised Hearth

DET Detached Schl School

DN Down Scrn Screened

DW Drywall SFRes Single Family Residence

Elec Electric Stco Stucco

ENCL Enclosed ST Street

ENTR Entrance S /D Subdivision

EQPT Equipped STG Storage

FHA Fed. Housing Administration STW&DRS Storm windows & doors

FmHA Farmers Home Administration Trans. Transportation

Fin Finished UROG Unfinished rm over garage

FP Fireplace Util Utilities

Flr Floor V Value

FR Frame VHDA Va Housing Dev Authority

Frntg Frontage W /D/H Wood Double Hung

GAR Garage WoBay Walk -out Bay

G1A Garage 1 attached WIC Walk In Closet

G2A Garage 2 attached WSI Wood Siding

G1D Garage 1 detached WS Wood Stove

G2D Garage 2 detached W / U Walk Up

G1Bi Garage 1 Built in WWCPT Wall to wall carpet

GFF Gas Floor Furnace WC Washer Connection

GFWA Gas Force Warm Air WSCT Wainscot

GSHW Gas Force Hot Water

GSH Gas Space Heater

GWF Gas Wall Furnace

HC Hollow Core

**ADDENDUM 1**

SUPPLEMENTAL INFORMATION FOR APPRAISAL REPORT (URAR)

Dated \_\_\_\_\_\_\_\_\_\_ on the property located
at\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_. The VA case number
is \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

1.  Appraisal report received from Lender
    \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(date)

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2.  Name of occupant if applicable
    \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

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3.  Entry (was / was not) gained.

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4.  The average length of marketing time is \_\_\_\_\_\_\_\_\_\_\_\_\_
    days.

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5.  The average list price to sale price ratio is
    \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ %.

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6.  Emergency repairs (are / are not) required.

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7.  Repair requirements:

[Cost]{.underline} [Contributory Value]{.underline}

[Total Cost]{.underline} [Total Contributory Value]{.underline}

Narrative explaining attempts to gain entry:

Sincerely,

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Appraiser

EXAMPLE

**[ADDENDUM 2 TO LIQUIDATION APPRAISAL]{.underline}**

[Competitive Information]{.underline}

1.  8 Pickett St. , Garden City, 6 blocks from subject

-   ranch / slab

-   6/4/2 1400 SF [(+)]{.underline}

-   20 years

-   listed at \$67,500 Ray Homes

-   reduced from \$69,500 on 5/1, on market 60 days

(very competitive with subject, has additional bath but no garage or
deck, exterior condition superior).

2.  21 Baker St., Garden City, 2 blocks

-   (see attached MLS card and photo)

-   on market 90 days at \$59,500

(newer ranch, 8 yrs, very similar to subject in design and layout but in
much inferior condition, sale by local bank, represents lower end for
subject)

3.  14 Whitney Ave., Hamilton, 10 blocks

-   ranch / slab

-   6/5/1 1600 ( [+]{.underline} )

-   15 years

-   current contract pending @ \$65,000, Wenham Homes

-   on market 120 days, original listing at \$75,000

(Same basic style as subject, garage converted to 5^th^ bedroom,
location in adjacent town is of no impact - same school and water /
sanitary district)

[General Market Information]{.underline}

1.  Listing period to sale is stabilizing at about 90 days.

2.  Based upon my file information sales / listing ratio is
    approximately 90 percent in last 12 month period.

**ADDENDUM 3**

EXAMPLE OF FEE APPRAISER'S ADDENDUM PROVIDING ITEMIZED REPAIRS FOR
SUBJECT PROPERTY, ACCESS, AND OTHER REQUIRED INFORMATION

Description of Needed Repair / Estimated Estimated

[Physical Inadequacy]{.underline} [Cost to Cure]{.underline}
[Contributory Value]{.underline}

1.  All exterior trim needs painting \$1,200 \$1,500

2.  Roof shingles worn, at end of life, replace, 3,000 3,000

3.  Downspouts and splash blocks missing at

all corners 400 \*

4.  Several pieces of siding on north side are

wind damaged and bent away from dwelling 350 \*

5.  Storm door glass is broken 100 \*

6.  Clean up debris in rear (old deck material,

boxes , couch 100 \*

7.  Replace damaged kitchen floor covering

(completely torn) 500 500

\_\_\_\_\_\_ \_\_\_\_\_

TOTALS \$5,650 \$5,500

\* These items together are considered to have a \$500 effect on value.

[Access Problem Information Examples:]{.underline}

-   (Occupied Property Example) Called owner, Mr. Smith at 000-5900 on
    6/17. Agreed to meet me at property on 6/19, but was not home.
    Reached Mr. Smith on 6/20, now refuses to let me gain interior
    access. Visited property on 6/21. Observed dwelling from street,
    exterior looks to be well maintained.

-   

-   (Vacant Property Example) Local servicing agent access information
    noted on VA form 26-1805 not correct, called holder on 6/17 (Access
    mortgage, 000-555-2222, Mr. Entry). Advised keys would be sent.
    Received keys on 6/23, wrong ones. Call Mr. Entry 6/23, correct keys
    received on 6/28. Assignment completed 6/29.

[Other Required Information Example]{.underline}:

a.  No emergency repairs

b.  Vacant and secured

c.  N/A

d.  See attached for photos