> **Our Fee Appraiser Handbook is to supplement the appraisal
> requirements and guidelines provided in the VA Lender's Handbook,
> chapters 10 through 16. If you wish to get a copy of the VA Lender's
> Handbook, please logon to www.homeloans.va.gov/lender.htm and download
> a copy.**
>
> **Where there is any inconsistency between this handbook and the VA
> Lender's Handbook, the Lender's Handbook will be considered the
> controlling document. In cases where the two handbooks vary as to
> standards of performance, the more stringent requirement will
> govern.**

**CONSTRUCTION AND VALUATION CONSOLIDATION AND REMOTE MANAGEMENT**

Effective October 1, 2002, the Denver Regional Loan Center (RLC) assumed
full management and operational control of all Construction and
Valuation activity throughout Alaska, Washington, Oregon, Idaho, Utah
and New Mexico. This was in addition to the three states of Montana,
Wyoming and Colorado. This was made possible through restructuring of
all VA processes, relocation of employees and the introduction of a
number of technological innovations.

In addition, there has been a tremendous growth of the Lender Appraisal
Processing Program (LAPP). We are currently at 94% of all VA origination
appraisals being ordered through our LAPP lenders and not processed by
the VA staff. This changes our core mission from production to oversight
of Appraisers and LAPP lenders.

Some key developments in the C&V restructuring process:

-   E-commerce is introduced. This requirement went into effect August
    1, 2001.

-   The Appraisal System (TAS). This new internet-based system generates
    appraisal assignments and case numbers. It allows for appraiser to
    access their VA appraisal assignment request workload.

-   New C&V Management Team. In December 2001, Joe Reno was promoted
    from Chief of the Construction & Valuation Section to Valuation
    Officer. In May 2002, the Denver Senior Appraiser, Valerie Herrera
    was promoted to Assistant Valuation Officer. The other Assistant
    Valuation Officer transferred from the Oakland Regional Office. His
    name is Howard Kelmenson.

-   Outbased Senior Appraisers/SAH Agents Selected. Four of the former
    Regional Office C&V staff appraisers are selected to remain as
    out-based employees. We selected one employee new to the C&V section
    and promoted and transferred one employee from San Diego, California
    to our Seattle office. We promoted and transferred one Denver C&V
    staff member for the Albuquerque, New Mexico position. These
    employees are in their local areas to do appraisal field reviews, to
    administer the Specially Adapted (SAH) program, to assist the Denver
    RLC and to be a liaison for local lenders, builders, and other
    program participants. Although our employees are living and working
    outside of the Denver area, they are on the Denver rolls and are
    remotely managed by the Valuation Officer and one of the Assistant
    Valuation Officers.

**CONTACTS**

Please make sure that you have reviewed your appraisal guide before
calling us. The phone number is 1-(888)-349-7541, option 1.

+---------------+---------------------------+--------------------------+
| NAME          | TITLE                     | E-MAIL ADDRESS           |
+---------------+---------------------------+--------------------------+
| Glenn Dalaney | Program Clerk             | lgydalaN@VBA.VA.GOV      |
+---------------+---------------------------+--------------------------+
| Karen Hecht   | Denver Staff Appraiser    | lgyKHECH@vba.va.gov      |
+---------------+---------------------------+--------------------------+
| Chris Braning | Denver Staff Appraiser    | lgycbran@vba.va.gov      |
+---------------+---------------------------+--------------------------+
| Kellie Vasey  | Denver Staff Appraiser    | LGYKVASE@VBA.VA.GOV      |
+---------------+---------------------------+--------------------------+
| John Matthews | Denver Staff Appraiser    | LGYJMATT@VBA.VA.GOV      |
+---------------+---------------------------+--------------------------+
| Laura Cronk   | Denver Staff Appraiser    | LGYLCRON@VBA.VA.GOV      |
+---------------+---------------------------+--------------------------+
| Terri Hogan   | Denver Staff Appraiser    | LGYTHOGAn@VBA.VA.GOV     |
+---------------+---------------------------+--------------------------+
| Bhavanidas    | Denver Staff Appraiser    | LGYBKODE@VBA.VA.GOV      |
| Kode          |                           |                          |
+---------------+---------------------------+--------------------------+
| Guy Main      | Senior Staff Appraiser    | CHYgmain@vba.va.gov      |
|               | (Wyoming & Montana)       |                          |
+---------------+---------------------------+--------------------------+
| Marlene       | Senior Staff Appraiser    | lgymputn@vba.va.gov      |
| Putnam        | (Oregon )                 |                          |
+---------------+---------------------------+--------------------------+
| Joe Ladan     | Senior Staff Appraiser    | lgyjLada@vba.va.gov      |
|               | (Washington)              |                          |
+---------------+---------------------------+--------------------------+
| Lorre Stead   | Senior Staff Appraiser    | LGYlSTEA@VBA.VA.GOV      |
|               | (Washington)              |                          |
+---------------+---------------------------+--------------------------+
| John          | Senior Staff Appraiser    | LGYJCUNN@VBA.VA.GOV      |
| Cunningham    | (Washington)              |                          |
+---------------+---------------------------+--------------------------+
| Richard       | Senior Staff Appraiser    | LGYRRODR@VBA.VA.GOV      |
| Rodriguez     | (Alaska)                  |                          |
+---------------+---------------------------+--------------------------+
| Jim Bull      | Senior Staff Appraiser    | LGYJBULL@VBA.VA.GOV      |
|               | (New Mexico & Utah)       |                          |
+---------------+---------------------------+--------------------------+
| Howard        | Assistant Valuation       | LGYHKELM2@VBA.VA.GOV     |
| Kelmenson     | Officer                   |                          |
+---------------+---------------------------+--------------------------+
| Valerie       | Assistant Valuation       | LGYVHERR@VBA.VA.GOV      |
| Herrera       | Officer                   |                          |
+---------------+---------------------------+--------------------------+
| Joe Reno      | Valuation Officer         | LGYJRENO@VBA.VA.GOV      |
+---------------+---------------------------+--------------------------+
| C&V Fax \#    | \(303\) 914-5618 or       |                          |
|               |                           |                          |
|               | \(303\) 914-5688          |                          |
+---------------+---------------------------+--------------------------+
| C&V Websites  | www.homeloans.va.gov      | www.vba.va.gov/ro/denver |
+---------------+---------------------------+--------------------------+

**THE APPRAISAL PACKAGE**

In order to expedite processing, please make sure the following items
are in your package & that the VA case number is in the upper right hand
corner of each page before mailing:

1\. URAR, page 1

2\. URAR, page 2 (physical signature or electronic signature if
e-commerce approved)

3\. Addenda to URAR

4\. Subject photos

5\. Comparable photos

6\. ***[Legible]{.underline}*** location maps.

7\. Floor plan sketches

8\. Limiting conditions

9\. Contract (if applicable). In conformance with USPAP requirements,
you are expected to make a reasonable attempt to obtain the sales
contract and disclosure statement(s). **[*Under no circumstances, are
you to delay forwarding the report to the requester and to VA* because
the sales contract or disclosure statement has not been
received.]{.underline}**

10\. Miscellaneous. Please make sure that you only send items that are
required to support your appraisal. We do not require copies of your
billing invoices or cover sheets.

> ![](media/image1.emf){width="1.5291666666666666in"
> height="0.9944444444444445in"}

***[Benefits of E-Commerce]{.underline}***

E-commerce offers several clear benefits to VA, the fee appraiser, and
to the lender. Among these are significant savings in:

-   Storage space

-   Cost of postage, paper, packaging, photocopying, etc.

-   Time, as "mailing" time is reduced from days to seconds

***[Exemptions for Low Volume]{.underline}***

Some exemptions from the e-commerce requirement were authorized by the
Denver RLC. These were strictly limited to appraisers receiving an
average of ten or fewer assignments per year. All exemptions, including
those authorized by other Regional Offices, will be reviewed and may be
rescinded if appraisal volume is found to have increased or if mailing
delays are shown to impair our timeliness or customer service. Exempt
appraisers must overnight all appraisals to VA and the lender.

**E-Commerce Ready Appraisers**

**SUBJECT LINE AND PDF FILE NAMING CONVENTION: STATE THEN CASE NUMBER.
*[EXAMPLE: CO 39-39-6-0810810]{.underline}*.**

+-----------------------------------+-----------------------------------+
| > **Type of Appraisal Request**   | > **Appraisal Distribution**      |
+-----------------------------------+-----------------------------------+
| > All non-LAPP IND appraisals     | > One pdf of appraisal to VA via  |
|                                   | > E-commerce                      |
|                                   | > (39/VAAppraisals@vba.va.gov)    |
+-----------------------------------+-----------------------------------+
| > Liquidations (LGI) identified   | > One pdf of appraisal to lender. |
| > as                              | > One copy to VA                  |
| >                                 | >                                 |
| > Servicer Loss Mitigation        | > identified as a SLMP Compromise |
| > Program (SLMP)                  | > Sale                            |
| >                                 | > (39/Liquidations@vba.va.gov)    |
| > Compromise Sale                 |                                   |
+-----------------------------------+-----------------------------------+
| > Liquidations (LGI) identified   | > One pdf of appraisal to VA only |
| > as SLMP                         | > (39/Liquidations@vba.va.gov)    |
| >                                 |                                   |
| > Deed-in-lieu                    |                                   |
+-----------------------------------+-----------------------------------+
| > Liquidations (LPL) identified   | > One pdf to Countrywide, one pdf |
| > as Countrywide                  | > to VA                           |
| >                                 | >                                 |
| > being the servicer/lender       | > (39/Liquidations@vba.va.gov)    |
+-----------------------------------+-----------------------------------+
| > LAPP appraisal with lender      | > One copy of appraisal to lender |
| > E-commerce ready                | > and one copy                    |
| >                                 | >                                 |
| > and providing E-mail address on | > to VA, both being transmitted   |
| > VAF 26-1805                     | > via                             |
|                                   | >                                 |
|                                   | > E-commerce                      |
|                                   | > (39/LappAppraisals@vba.va.gov)  |
+-----------------------------------+-----------------------------------+
| > LAPP appraisal if lender is not | > One copy of appraisal to VA     |
| > E-commerce                      | > sent via                        |
| >                                 | >                                 |
| > ready and did not provide       | > E-commerce                      |
| > E-mail address on               | > (39/LappAppaisals@vba.va.gov)   |
| >                                 | >                                 |
| > VAF 26-1805.                    | > and one copy of appraisal       |
|                                   | > mailed to lender via regular    |
|                                   | > mail                            |
+-----------------------------------+-----------------------------------+

> ![](media/image2.emf)
>
> **E-Commerce Exempt Appraisers**

+-----------------------------------+-----------------------------------+
| > **Type of Appraisal Request**   | > **Appraisal Distribution**      |
+-----------------------------------+-----------------------------------+
| > All non-LAPP IND appraisals     | > Two copies of appraisal to VA   |
|                                   | > via ***[overnight               |
|                                   | > delivery]{.underline}***        |
+-----------------------------------+-----------------------------------+
| > Liquidations (LGI) identified   | > One copy of appraisal           |
| > as Servicer Loss Mitigation     | > ***[overnight                   |
| > Program (SLMP) Compromise Sale  | > delivery]{.underline}*** to     |
|                                   | > lender. One copy ***[overnight  |
|                                   | > delivery]{.underline}*** to VA  |
|                                   | > identified as a SLMP Compromise |
|                                   | > Sale.                           |
+-----------------------------------+-----------------------------------+
| > All Deed In Lieu's including    | > Two copies of appraisal         |
| > Liquidations (LGI) identified   | > ***[overnight                   |
| > as Servicer Loss Mitigation     | > delivery]{.underline}*** to     |
| > Program (SLMP) Deed-in-lieu     | >                                 |
|                                   | > VA only.                        |
+-----------------------------------+-----------------------------------+
| > Liquidations (LPL) identified   | > One copy ***[overnight          |
| > as Countrywide being the        | > delivery]{.underline}*** to     |
| > servicer/lender                 | > Countrywide,                    |
|                                   | >                                 |
|                                   | > and one copy ***[overnight      |
|                                   | > delivery]{.underline}*** to VA. |
+-----------------------------------+-----------------------------------+
| > LAPP appraisal with lender      | > One copy ***[overnight          |
| > E-commerce ready and providing  | > delivery]{.underline}*** to     |
| > E-mail address on VAF 26-1805   | > LAPP lender                     |
|                                   | >                                 |
|                                   | > and one copy mailed to VA       |
|                                   | > regular mail.                   |
+-----------------------------------+-----------------------------------+
| > LAPP appraisal with lender not  | > One copy of appraisal to LAPP   |
| > E-commerce ready and did not    | > lender and one copy to VA via   |
| > provide E-mail address on       | > regular mail.                   |
| >                                 |                                   |
| > VAF 26-1805                     |                                   |
+-----------------------------------+-----------------------------------+

**PERFORMANCE INFORMATION**

-   Assignments are made on a rotating basis.

-   Assignments on Proposed Construction or Condominiums must be done by
    appraisers designated by VA. If you are ***[not]{.underline}***
    designated to complete these types of appraisals, you must contact
    VA.

-   Appraisers must be available during normal business hours for
    assignments & telephone calls. Provide a reliable answering service
    & return all calls as quickly as possible but at a maximum within 24
    hours.

-   **VA requires that you notify this office 7 days before you take a
    vacation.** This must be done via the phone. Our phone number is
    1-(888)-349-7541 or (303)-914-5626, option 1. Do not fax or e-mail
    your request.

-   Notify VA ***[anytime]{.underline}*** you are unavailable (illness,
    vacations, etc.) Changes in your address, telephone #, fax #, or
    e-mail address must be made directly into TAS by the fee appraiser.
    Provide VA & your answering service with the name of another VA fee
    appraiser who will cover for you during your absence.

-   Timeliness is ***[five]{.underline}*** calendar days on liquidation
    appraisals. All other appraisals are expected to be submitted in a
    timeframe that is comparable to the turnaround time for conventional
    cases, except MCRV's. MCRV timeliness is **14** days.

-   Billing & payment of fees are between you & the requester. If you
    are consistently having problems with a certain lender, fax us
    details & we will attempt to assist you. Correspondence should be to
    the attention of Howard Kelmenson.

-   Notify VA in writing if you believe an assignment is a conflict of
    interest. Fax correspondence to (303) 914-5618.

-   VA fee appraiser is responsible for **all** information in the
    report.

> Must personally inspect the property inside & out.
>
> Must observe at least the exterior of all comparables.

-   You must conduct yourself ethically.

> Be courteous to all program participants & the general public.
>
> Do not make comments or derogatory remarks of any kind.
>
> Do not discuss repairs with the buyer or seller.

-   Do not divulge information in your appraisal report to anyone other
    than VA staff or a LAPP Staff Appraisal Reviewer (SAR).

***[Desk and Field Reviews of Appraisal Reports]{.underline}***

Every appraisal report will be desk-reviewed by a LAPP Lender's Staff
Appraiser Reviewer (SAR), by a VA Staff Appraiser, or both, to verify
that

-   the report was submitted timely

-   that the Fee Appraiser's conclusions of value are consistent, sound,
    supportable, and logical

-   the report was prepared in accordance with acceptable appraisal
    techniques and standards (USPAP) as well as specific VA
    instructions.

In addition, all appraisal reports are subject to field review by VA
staff or by the LAPP lender.

***[Quality Control and Standards]{.underline}***

All appraisal reports are reviewed for both Work Quality and Timeliness.
Non-acceptable quality or timeliness findings in any appraisal will be
classified as Negative Work Quality Findings or Negative Timeliness
Findings. All Negative Work Quality Findings are further categorized
according to their significance into Substantive or Non-substantive
findings.

-   A Substantive negative work quality finding will generally be
    assessed where VA has determined that the fee appraiser made a
    serious error of fact or methodology that materially impacts the
    appraised value or condition of the property. Examples include, but
    are not limited to:

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-   Fraudulent reporting (misrepresentation of a material fact in the
    appraisal)

-   Appraising the wrong property

-   Failing to require necessary MPR repairs that may result in damage
    to the veteran

-   Repeating or failing to correct non-substantive errors after
    notification by VA

-   Continued disregard for VA instructions or requirements after they
    have been called to the Appraiser's attention

-   Serious USPAP violations

-   Sanctions by state licensing board

```{=html}
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```
-   A Non-substantive finding is generally one in which VA has
    determined that the fee appraiser made a relatively minor error of
    fact or methodology that did not impact the final value or the
    reported condition of the property. Examples include, but are not
    limited to:

```{=html}
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```
-   Failing to provide required information on the URAR (e.g., Remaining
    Economic Life, HOA dues on a condominium appraisal)

-   Incorrect reporting of distances between subject and comps

-   Inconsistency within the URAR (e.g., room count differs from page 1
    to page 2)\*\*

-   Failing to adequately describe reasoning in support of
    adjustments\*\*

-   Using time adjustments not supported or documented by pending sales
    or listings\*\*

-   Making insupportable or "wrong-way" adjustments (plus instead of
    minus) \*\*

-   Minor USPAP violations

> \[\*\*Note: The errors marked \*\* could also be substantive depending
> on the degree of value impacted.\]

-   Documented negative timeliness or quality findings can form the
    basis for administrative action by VA against a Fee Appraiser.
    Additionally, an appraiser who exhibits chronically deficient
    Customer Service, as evidenced by documented unprofessional conduct
    or repeated complaint calls and letters from program participants,
    may also be subject to administrative action.

**GENERAL INFORMATION**

**1. Assignments**

a\. Assignments are made to VA fee appraisers on a rotating basis. All
appraisers must be available during normal working hours for assignments
& telephone calls or provide a reliable answering service & *return all
calls within 24 hours*. *[Provide your answering service with the name &
number of another VA Appraiser to handle your inspections,
etc.]{.underline}* TAS (tas.vba.va.gov) has information regarding any
assignments made to you.

**VA requires that you notify this office 7 days before you take
yourself off of rotation.** In cases of an emergency, please notify us
as soon as possible. This must be done via the phone. Please call VA to
request time off. Our phone number is 1-(888)-349-7541 or
(303)-914-5626, option 1.

***[Note]{.underline}***: The TAS address is: tas.vba.va.gov. If you are
new to TAS, please sign in as a new user. You will need to know your VA
Appraiser ID.

FIRST SCREEN:

![](media/image3.emf){width="6.728472222222222in" height="2.3625in"}

SECOND SCREEN:

![](media/image4.emf)

THIRD SCREEN. You will choose the state you are located in. Then put in
your VA appraiser ID, social security number and e-mail address. Follow
the remaining prompts.

![](media/image5.emf){width="6.752777777777778in"
height="3.3020833333333335in"}

It is your responsibility to ensure that all assignments received (or
assigned to you on TAS) prior to the start of your vacation period are
completed and e-mailed. Be sure you notify VA of any assignment(s) still
pending so we can reassign them to another appraiser. It is your
responsibility to monitor your TAS account frequently. Checking daily
will enable you to keep track of your workload and will alert you to new
VA appraisal assignments as soon a the requester orders them. Your
"Appraiser Pending Assignments" list on TAS will display the case
number, the subject property address, the name, address and phone number
of the person and company that ordered the appraisal, and the type of
case (i.e., LAPP, IND, LGI, etc.). When viewing your pending assignments
in TAS, we suggest that you keep the following points in mind:

**LAPP & Liquidation (LGI - especially "SLMP") Requests:** Upon request,
these appraisals must be e-mailed to the requester. You should have
already e-mailed to VA. If the assignment is still showing as pending
and you have sent your appraisal, this generally means we have not
received your appraisal. Please send it again if it has been several
workdays.

**LAPP, IND or LGI Requests:** If the requester cancels the request,
please notify VA. TAS will reflect that you still have the case pending
until you notify us of the cancellation.

You may notice that your "Appraiser Pending Assignments" list includes
some cases that you have already completed and submitted to VA and/or to
the LAPP lender. TAS will continue to display the status "out for
appraisal" until VA receives a copy of the appraisal.

*Please be aware that any cases unaccounted for during any period of
your unavailability are subject to reassignment in the event we are
unable to reach you to determine status. This includes times that you
are not on vacation. If we are unable to reach you for one business day,
we will automatically reassign the case and any work you have done on
this case will be null and void and you will be unable to charge for
your work.*

b\. Provide a URAR, complete in every detail, using acceptable appraisal
practices & assuring that the property meets the Minimum Property
Requirements (MPR's) for Existing Construction, or include those repairs
necessary to make the property conform to the MPR's. You may, after
completion of the report, recommend that the property be rejected based
on repairs not being economically feasible to perform or due to other
serious structural or environmental problems.

***2. [Timeliness]{.underline}***

a.  ***[The appraisal report must be forwarded no later than five
    calendar days on liquidations. All other appraisals are to be
    completed in the timeframe that is typical for conventional
    appraisal assignments. Your timeliness starts the date you receive
    the assignment. It is your responsibility to check pending
    assignments and follow up with the lender on cases where the 26-1805
    has not been received by you within 24 hours. Do not delay beginning
    work on the appraisal when you have received the 26-1805. The
    timeliness standard is the maximum amount of time allowed. We prefer
    that you complete all VA appraisal assignments in 5 days or less. If
    you cannot complete the assignment within the time limit, you should
    e-mail us the reason and annotate on the appraisal report in the
    comments on cost approach section. Reasons such as \"unusual
    property, comparables hard to find\", or \"heavy workload\" are
    unacceptable. Continued tardiness may result in limiting or
    withholding assignments or removal. Show the date you receive & mail
    the assignment in the cost approach comments of the URAR. It is
    imperative that you show an accurate date of receipt & mailing. The
    date the report is signed should be the date the report is completed
    & e-mailed or overnighted.]{.underline}***

If the requester asks you to delay the appraisal assignment for any
reason (e.g., seller is on vacation, customer preference items not yet
installed, etc.) and this delay would result in the appraisal report not
meeting VA timeliness standards by ***[fewer than two calendar
days]{.underline}***, you should:

-   require the requester to provide you a written request for such
    delays and

-   include a copy of the request in your appraisal package (scan and
    attach to your pdf appraisal)

-   fully document the delay in you cost comments.

If the expected delay would result in the appraisal missing VA
timeliness standards by three or more calendar days, you should contact
the Denver C&V for guidance prior to agreeing to such a request.

Note: When access to the property has been delayed for any reason beyond
your control, the appraisal report must be submitted no later than two
business days after access to the subject property has been achieved.

In conformance with USPAP requirements, you are expected to make a
reasonable attempt to obtain the sales contract and disclosure
statement(s). ***[Under no circumstances, are you to delay forwarding
the report to the requester and to VA]{.underline}*** because the sales
contract or disclosure statement has not been received.

b\. Reconsideration requests (appeals) must be responded to within 7
calendar days from the date the reconsideration is faxed or e-mailed to
you. Please remember, we have a veteran that is closing & is anxious for
our answer. A quick response is greatly appreciated. See paragraph 29
for procedure.

c\. When you are requested by VA to reply by a certain date, please
reply in writing by that date. Please only call if you need
clarification of our request. Do not call to discuss the matter when we
have requested a written response.

**3. Fees & Billing Procedures for Origination Appraisals &
Inspections**

As a general rule, Fee Appraisers may not charge their VA clients more
than they would normally charge other clients for similar work. Maximum
fees for VA appraisals and inspections are established by each VA
Regional Office for their area of jurisdiction.

a\. Appraisal & Inspection Fees

  ------------ ------------ --------- --------- ------ --------- --------- ------------ ----------
  State        Single       Duplex    Tri plex  4 plex           Condo     Inspection   Mileage
               Family                                                                   

                                                                                        

  Alaska       \$500\*      \$750\*   \$800\*          \$850\*   \$500\*   \$65         \$.36/mi

  Colorado     \$350        \$550     \$575            \$600     \$400     \$65         \$.36/mi

  Idaho        \$400\*      \$600\*   \$650\*          \$700\*   \$425\*   \$65         \$.36/mi

  Montana      \$400\*      \$415\*   \$415\*          \$415\*   \$400\*   \$65         \$.36/mi

  New Mexico   \$350\*      \$375     \$425            \$425     \$350     \$65         \$.36/mi

  Oregon       \$450\*      \$550\*   \$575\*          \$600\*   \$475     \$65         \$.36/mi

  Utah         \$350\*      \$600\*   \$600\*          \$600\*   \$350\*   \$65         \$.36/mi

  Washington   \$425\*      \$600\*   \$700\*          \$750\*   \$450\*   \$65         \$.36/mi

  Wyoming      \$350        \$550     \$575            \$600     \$400     \$65         \$.36/mi
  ------------ ------------ --------- --------- ------ --------- --------- ------------ ----------

\*Fee established prior to Denver oversight. Many of the states are
non-disclosure states.

b\. Billing & payment of fees are between you & the requester. When a
particular requester has been consistently late in paying for 90 days or
more, you may send documentation to this office. We will attempt to
persuade the lender that it is in their best interest to pay the VA
appraiser timely. We are constantly working with lenders on a national
and local level to resolve this problem. We have assigned the office
AVO, Howard Kelmenson, the task of working with you and the lenders to
correct his situation.

You may request your fees in advance for lenders that are consistently
over 90 days, but you must not delay the completion of the assignment or
withhold the release of the appraisal. The appraisal is not to be held
hostage.

**4. Conflict of Interest**

Recent policy changes no longer require fee personnel to submit an
annual Statement of Interests. Nonetheless, VA Fee Appraisers are held
to those requirements and must continue to adhere to them. Please read
the following statements.

*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 of designated or
approved Fee Appraisers and Compliance Inspectors, any 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
contained therein 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 that 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.*

```{=html}
<!-- -->
```
-   *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.*

```{=html}
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```
-   *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.*

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-   *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.*

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

The above examples are not all-inclusive, but they do illustrate some
obvious conflicts of interest.

The provisions above do allow you to act as sales agent or broker in
connection with a particular property. However, if you receive an
appraisal related to VA financing on that property, then you should
immediately contact VA and request reassignment of that case to another
appraiser.

**5. Use of Associate Appraisers**

The VA does not appoint firms or approve review appraisers. The VA
approved fee appraiser is personally responsible for ALL information in
the report & must personally inspect the property inside & out before
completing the certification at the bottom of the appraisal report by
signing their name. It is unacceptable for an appraiser to sign a report
without having inspected the property. The appraiser must also
personally observe the exterior of each comparable sale used & is
responsible for the selection & analysis of the comparables & the final
value estimate. These functions cannot be performed by anyone else. An
assistant may perform such tasks as researching courthouse records,
verifying market information, & the typing & assembling of the report.
The appraiser must clearly specify the activities the assistant
performed in the Reconciliation section of the report. Failure to comply
with VA's requirements in this area will constitute a basis for removal
from the fee panel.

**6. Conduct & Ethical Practices**

a\. Fee appraisers are considered to be professionals. You are expected
to conduct yourselves in a professional manner & support the VA program.
Please be courteous to all program participants & the general public in
the performance of your duties. This includes being professional with
the VA staff. Any valid evidence that you are not courteous will be
grounds for disciplinary action, e.g., reprimand, suspension, or
removal.

b\. Avoid making comments or derogatory remarks of any kind concerning
the VA program, house, neighborhood, or value. Make a written note of
required repairs. If you discuss repairs with the buyer or seller,
inform them that your appraisal report still need to be reviewed by the
appraisal underwriter and there is a possibility that changes to your
repairs or conditions will be changed. If the seller or realtor provides
a list of comparable sales, please accept it without comment & utilize
it as you would any other data. Consistently requesting market data from
sellers, buyers, or realtors as a substitute for thoroughly researching
the market could be cause for termination. Your job is to report to VA
your findings & recommendations based on your market research and
observations.

Remember that you do not have the authority to speak to anyone or any
group in an official capacity representing VA in regard to VA appraisal
regulations, procedure, or policies. This

includes newspapers, magazines, or organizations of lenders, builders,
or Realtors.

**7. Divulging Information from Appraisal Report & Other Inquiries**

a\. The appraiser should not divulge information about their appraisal
report to anyone other than VA staff or the LAPP Staff Appraisal
Reviewer (SAR). Upon receipt of the report, VA may make changes or
reject the property. Please note that the Freedom of Information Act
requires that any appraisal report is available to any party of interest
upon request.

b\. When information or assistance of any nature is requested, advise
the requester to contact VA or the LAPP SAR. We appreciate many fee
appraiser\'s desire to be helpful, but too often situations are confused
(e.g., not following the proper procedures, misinformation, time delays,
etc.).

c\. Do not perform any appraisal request not assigned to you in TAS
unless specifically instructed to do so by VA. Doing so may result in
non-payment of your work. Make sure you are assigned the case in TAS.

**THE PROPERTY**

-   You will be appraising the residential nature of the property only.
    (Exception is a liquidation).

-   There is no limit on acreage, but excess acreage must be valued as
    excess. You must determine what a typical site for subject
    (Exception is a liquidation).

-   Condominium appraisals must be completed on Fannie Mae Form 1073.
    Condos **must** have a VA ID number **prior** to appraisal. Your
    assignments may be limited for failing to list the VA ID number. You
    may access approved condominium projects on the internet website at
    http://condopudbuilder.vba.va.gov. Please check websites or call
    lender to make sure project is approved. You should call VA only as
    the last resort.

-   Provide a complete legal description.

-   Fannie Mae Form 1025 must be used for properties with multiple
    living units. Operating and Income Statement (FNMA 216) is not
    required.

-   House must meet MPR's or can be made to meet MPR's. Reject the
    property if it cannot be made to comply. Fully document rejections.
    (Exception: Liquidation assignments).

-   Do not require repairs other than safe, sanitary & structural
    soundness. (Exception is on liquidation appraisals, report all
    repairs including cosmetic). Do require repairs if you observe a
    problem. State your observation clearly.

-   Do not routinely require certifications for roofs, heating,
    individual septic system, etc. Require repairs if necessary.
    Complete a written report for each repair inspection whether the
    repairs are completed or not.

-   You may charge for each inspection.

-   Manufactured homes must be on a permanent foundation & must be taxed
    as real property.

![](media/image6.emf)

**8. External Influences - Special or Detrimental**

VA requires comment when certain influences affect a property as shown
below.

a\. Flood Maps & Special Flood Hazard Areas (SFHA's)

\(1\) SFHA's include only those areas that are in the 100-year flood
plain as delineated by FEMA (Federal Emergency Management Agency) on
flood maps developed through engineering studies. SFHA's are usually
defined into Zones A or V. If the subject is too close to a 100-year
flood zone to make a definite determination, make a judgement call
towards flood insurance being required. We would rather require & be
wrong then ***[not]{.underline}*** to require & be wrong. Provide a copy
of the applicable FEMA Flood Map with the location of the subject
property clearly indicated.

\(2\) Appraiser\'s are responsible for determining SFHA's.

(3 A property in a designated special flood hazard area is not eligible
for a VA guaranteed loan unless flood insurance is available. Return any
requests to appraise a property located in an area NOT PARTICIPATING in
the Flood Insurance Program & the property is located in a SFHA. Do not
appraise the property.

b\. Properties Near Airports

\(1\) If you believe a property is affected, you should determine &
report if possible the Composite Noise Rating (CNR) zone in which the
property is located. If you are unable to determine the CNR zone, you
should include in your report an opinion of the degree of airport
influence. Your final estimate of value should take into account any
loss of value attributable to airport proximity. Each comparable sale,
if not under the same influence, should be properly adjusted. If the
influence is severe, you should recommend rejection.

\(2\) There is no specific formula for arriving at the amount of
economic depreciation due to airport influence. Appraiser's must
consider each case individually & measure the effect of airport
development & use upon a particular property by a study of sales prices
& offers to purchase as well as rentals of comparable properties, within
the same area, as compared to data from generally similar areas not
affected by airport influence. In short, do not depreciate the value of
a property unless this depreciating influence results in buyer/renter
resistance reflected in the market. [Whatever the circumstances, note on
your report the fact that property is located in runway zone 2 or
3.]{.underline}

c\. Note commercial or industrial encroachments into the area & their
**[proximity]{.underline}** & **[effect]{.underline}**. If there is not
an effect, tell us. You must also note any problems such as land-locked
properties, joint driveways, ingress/egress problems or private streets.
In such cases, describe the accessibility to a public road.

d\. Easements, high-pressure gas & liquid petroleum transmission line
easements, & high voltage electric transmission line easements that are
on or adjacent to the subject property must be identified. The residence
cannot be located in these easements. Any detached improvements that are
in, or partially in, any such easement will not receive value in the
appraisal process.

**9. Farm and/or Acreage Appraisal**

VA does not make farm or other business loans, but 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 access roads, well, 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.

When considering acreage site, ask "Does acreage constitute an
over-improvement for area"?

Buildings other than the dwelling will be valued on the basis of the use
of the property for residential purposes only.

Provide a detailed map with the subject and comparables clearly located.
If necessary, draw in roads.

**10. Commercial/Residential Combinations**

a\. Whenever you appraise property used as both a residence and a
business, describe the arrangement and give a percentage ratio of
residential-to-commercial square footage. State the zoning in the area
and describe the adjoining property & the area\'s character. Provide
photos of commercial buildings, parking, and storage areas. Commercial
square footage must not exceed 25% of the total floor area. See
paragraph 35a.(5)(b).

b\. Do not automatically reject the property, although you may recommend
rejection. Prepare a complete appraisal report.

**11. Partial Release or Release of Real Property Security**

You may receive a letter of request from VA to provide an appraisal
based on security to be severed. Provide a complete report, giving the
value for the portion to be released, the value prior to release, & the
value of the remaining property.

**12. Condominium Appraisals**

a\. Designated Fee Appraisers are allowed to appraise condominiums. If
you have not been designated by the VA to appraise such properties,
please contact our office upon receipt of this type of assignment for
reassignment. Only condominium projects with a VA Condo ID number are
acceptable for appraisal. If you are unsure whether or not a Condo is
approved, check with the requester or check our website at
condopudbuilder.vba.va.gov. If the project is not on our website, it is
not approved. Please do not call VA to check status. If lender states
they have submitted to VA, we will approve as quickly as possible. Keep
checking website for approval. Remember your timeliness standard.

b\. Condominium appraisals are prepared on the Fannie Mae Form 1073.

**13. Planned Unit Developments (PUDs)**

**VA DOES NOT REQUIRE PUD APPROVAL. Lenders are to be referred to their
Lenders Handbook Chapter 16. Please do not refer them to VA. We no
longer approve PUD's.**

**14. Legal Descriptions**

The Fee Appraiser is to appraise the legal description provided to them
by the lender. The Fee Appraiser must assure that the address, legal
description, & lot dimensions are accurate & complete. If the legal
description is too lengthy, a separate sheet should be attached. The
legal description may be:

-   Lot, block and subdivision or;

-   Plat or deed book and page number or;

-   Survey description (e.g., Survey by Jones, dated March 20, 1980);

-   Metes and bounds.

**15. Gross Rent Multipliers & Appraisals involving Capitalization of
Income**

Fannie Mae Form 1025 must be used for multiple living unit properties.
The rental figure used must be realistic for the subject property since
our Loan Production Section uses this figure as income to the veteran in
qualifying him for the loan. Explain how you arrived at the rents and
the multiplier on the report or on an addendum. Operating and income
expense statement is not required.

**16. Common Party Walls**

If a property you are appraising has a common wall with an adjoining
property, such as row type housing, one-half of a duplex, one-fourth of
a 4-plex, etc., please annotate this condition on your report. Refer to
the Minimum Property Requirements in this handbook regarding party or
lot line wall.

**17. Zero Lot Lines**

Each living unit must be one that can be used and maintained
individually without trespass upon adjoining properties. If you appraise
a dwelling that is constructed at or near the lot line, please advise us
so that we may require an easement from the adjoining owner for access
to maintain and repair the subject.

**18. Water & Sewer Systems**

You must accurately report the system in place and the availability of
public service. If public utilities are [not]{.underline} available,
state this in your report. Require connection to public water and public
sewer when available and feasible.

-   Public water - Report, if available, even if the property is served
    by a well.

-   Public sewer - Report, if available, even if the property has a
    septic tank.

-   Private wells - Note and report if the well is located off the
    subject property or serves additional units (shared wells). On new
    construction, be specific as to whether the well is new or existing.
    Potability test required.

-   Septic tank - Report if there are any signs of malfunction.

-   Community water and/or sewer - Report on URAR. These systems are
    approved and monitored by a public authority. No further approval is
    required by VA.

**19. Equipment**

a\. All equipment included in the transaction should be valued, except
personal property; e.g., drapes, furniture, satellite dishes, &
above-ground pools.

b\. No value will be given for window air-conditioning units regardless
of condition. Wall units may be described under \"COOLING\" & valued.

**20. Local Building Codes**

Areas where local building codes are enforced to upgrade neighborhoods,
you must pay special attention to repairs. You will not be held
responsible for detecting code violations or enforcing local codes. Your
required repairs should bring the property up to VA MPR's.

**21. Repairs**

a\. Never assume that the property has been approved or that it has been
found acceptable by VA merely because you have an assignment. You are
our eyes in the field, & we depend on your observations for VA
compliance.

b\. The appraiser must be alert & observant when appraising properties,
especially older structures. If conditions are noted that affect the
livability of the property, you should recommend rejection for failure
to comply with MPR's. Describe the condition that prompted your
decision. All recommendations for rejection must be fully documented.

c\. Only repairs necessary to make the property conform to the MPR's
should be shown in your report. You may depreciate the property for lack
of homeowner's maintenance, but do not list any cosmetic repairs,
*[except in liquidation appraisals]{.underline}*. Each necessary repair
should be expressed in a brief, declarative way.

d\. Do not routinely require certifications for such things as roofs,
heating, electrical, plumbing, etc. Make a decision based upon your
professional observations. Either require corrective action by licensed
personnel if you have determined that the condition is not safe, sound,
or sanitary; or require nothing if the condition appears satisfactory.
We recognize that most fee appraisers are not engineers, plumbers, or
electricians. We are certain you are trained & observant professionals &
we must rely heavily on your judgment and recommendations.

e\. Require repairs similar to the following if indicated (this is not
all inclusive):

+----------------------+-----------------------+-----------------------+
| Have a licensed      | Replace all rotten    | Replace leaking or    |
| contractor replace   | wood, fascia,         | faulty plumbing       |
| roofing with seal    |                       |                       |
| down shingles        | siding, beams, joists | pipes & fixtures      |
|                      | sheathing, trim,      |                       |
|                      | flooring, etc.        |                       |
+----------------------+-----------------------+-----------------------+
| Replace faulty water | All windows are to be | Vent all unvented     |
| heater & heating     | in operating          | heaters to minimum    |
| unit                 | condition             | health & safety       |
|                      |                       | requirements          |
+----------------------+-----------------------+-----------------------+
| Scrape & paint all   | Replace defective     | Provide a dry         |
| exterior wood        | gutters &             | basement              |
| surfaces             |                       |                       |
|                      | downspouts            |                       |
+----------------------+-----------------------+-----------------------+
| Provide adequate     | Extend the vent hood  | Replace missing tile  |
| clearance between    | exhaust to            | in the bath           |
| the exterior siding  |                       |                       |
| & ground level       | outside or provide an | (where water damage   |
|                      | unvented hood.        | is apparent)          |
+----------------------+-----------------------+-----------------------+

***[Please report what you see.]{.underline}***

f\. When you list repairs needed due to structural inadequacies such as
foundations, slabs, fireplaces, and retainer walls, etc., describe the
problem adequately and recommend that VA or the SAR require a structural
engineer\'s report if you are not sure how the problem can be corrected.
You may recommend rejection.

g\. Explain thoroughly any settlement, dampness, rot, or damage that may
exist. Include in your repairs the necessary action needed to correct
same. If settlement is minor and no repairs are necessary, state this in
your report.

h\. Unvented space heaters are considered by VA to be a potential safety
hazard. When appraising a property that has unvented space heaters, you
should require \"install adequate heat, vented if gas.\" This
requirement should be shown on your report. The type of installation
will be left to the discretion of the seller.

i\. Defective lead-based paint, commonly used prior to 1978, must be
noted and must be removed or covered as a required repair item. (See
Paragraph 24, Lead-Based Paint)

**22. Repair Certifications**

a\. *Do Not mail a copy to VA.*

b\. When you are requested to make a repair inspection, you must refer
to a copy of the NOV that will specify the repairs required by VA. For
LAPP cases, certify the repairs you required on your appraisal report,
specifying on your letterhead any that have not been completed. Advise
the lender by letter that \"All repair requirements have been properly
completed\" or list the items that have not been properly completed. An
inspection fee may be collected from the requester (see current bulletin
for amount). If the lender requests the inspection, the appraiser should
bill them.

c\. Each time you visit the property to make a repair inspection, you
are to complete a written report on your letterhead whether the repairs
are completed or not. You may charge for each inspection. List all
repairs individually.

**23. Lead Based Paint**

Defective lead-based paint must be noted and removed or covered as a
required repair item. If the property was built after 1978, you may
assume that the property does not have lead-based paint.

a\. The use of lead based paint is prohibited on applicable surfaces of
any properties to be financed by VA. The following definitions apply:

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

-   \"Applicable surfaces\" means all interior and exterior surfaces.

-   "Immediate hazard\" means paint (which may contain lead) on
    applicable surfaces that are cracking, scaling, chipping, peeling,
    or loose.

-   \"Defective paint condition\" means any paint on applicable surfaces
    that are cracking, scaling, chipping, peeling, or loose.

b\. Procedures and Treatment Applicable to Appraisals and Compliance
Inspections.

\(1\) All defective paint conditions are assumed by VA to involve
lead-based paint and to constitute immediate hazards that must be
corrected, unless testing shows that lead is not present in the paint at
a level above that permitted by law. (Most of the paint used in
structures built in 1978 or earlier was lead based.)

\(2\) All applicable surfaces identified as immediate hazards or
defective paint conditions shall receive adequate treatment to prevent
the ingestion of contaminated paint. Particular care shall be taken to
correct conditions of cracking, scaling, chipping, peeling, and loose
paint before repainting. All such surface conditions that require
treatment shall be thoroughly cleaned (washed, sanded, scraped, wire
brushed, or otherwise cleaned) to remove all cracking, scaling,
chipping, peeling, & loose paint on applicable surfaces & then repainted
with two coats of a suitable nonleaded paint. If the paint film
integrity of the applicable surface cannot be maintained, the paint
shall be completely removed or the surface re-covered with a suitable
material such as gypsum wallboard, plywood, or plaster before any
repainting is undertaken.

\(3\) When appraising or making compliance inspections of properties
intended to be financed with VA-guaranteed home loans, fee personnel
will apply the above provisions and will require the correction of
defective paint conditions.

**24. Off Site Improvements**

a\. Although the installation and acceptance of utilities, streets, &
drainage structures may not be completed at the time of your appraisal,
your market value may be based on completion of all subdivision
facilities. You should make the subdivision installations a condition of
your appraisal report in both existing and proposed cases.

b\. If no street paving is proposed, you may base your value on unpaved
streets & make no requirements for paving. Please provide a full
explanation of the situation so that there can be no misunderstanding as
to the requirement for street paving.

c\. In addition to the subdivision improvements, you may require sodded
ditches, swales or slopes, retaining walls, maximum driveway grades,
privacy or safety fences, turnarounds, and any other improvement
necessary to bring the subject property up to minimum standards.

d\. Only designated appraisers are to complete proposed construction
cases. You may request a copy of the subdivision plat to assure that you
appraise the correct lot. As in all cases, where the builder is to
provide additional information, you may hold the case after informing
the builder and VA of the problem. Make sure your URAR reflects the
delay & time of suspension.

e\. In proposed cases, the fee compliance inspector will assure that the
special conditions have been met at the time of the final inspection.

f\. In existing cases, where subdivision improvements are not complete,
the fee appraiser will be assigned to make the final inspection of the
items mentioned on the appraisal report.

25\. Modular Homes & Manufactured Homes

+-----------------+-----------------------------------------------------+
| > a\.           | > To be eligible for a VA loan term of 30 years, a  |
| > Manufactured  | > manufactured home must be:                        |
| > Home          |                                                     |
| > classified as | -   classified and taxed as real property           |
| > real estate   |                                                     |
|                 | -   properly and permanently affixed to a permanent |
|                 |     foundation (See Foundation Requirements)        |
|                 |     substantially conform with VA MPRs, conform     |
|                 |     with applicable building code and zoning        |
|                 |     requirements for real estate.                   |
+-----------------+-----------------------------------------------------+
| > b\. Proposed  | > When the foundation for a manufactured home has   |
| > or Under      | > not been fully completed and                      |
| > Construction  | >                                                   |
|                 | > the unit has not been installed, the home is      |
|                 | > considered to be "proposed or under               |
|                 | > construction."                                    |
|                 | >                                                   |
|                 | > There are two MPR-related requirements for these  |
|                 | > proposed or under                                 |
|                 | >                                                   |
|                 | > construction cases :                              |
|                 |                                                     |
|                 | -   The site and on-site improvements (but not the  |
|                 |     manufactured unit itself) must meet the         |
|                 |     requirements outlined in Section d of this      |
|                 |     paragraph.                                      |
|                 |                                                     |
|                 | -   The manufactured home unit must be properly     |
|                 |     attached to a permanent                         |
|                 |                                                     |
|                 | -   foundation system that is constructed to        |
|                 |     withstand both supporting loads and             |
|                 |     wind-overturning loads, and is acceptable to    |
|                 |     the building authority having jurisdiction.\    |
|                 |     \                                               |
|                 |     *References*: In addition to *Proposed          |
|                 |     Construction MPRs* in this chapter,             |
|                 |                                                     |
|                 | -   additional information regarding manufactured   |
|                 |     home installations can be                       |
|                 |                                                     |
|                 | ```{=html}                                          |
|                 | <!-- -->                                            |
|                 | ```                                                 |
|                 | -   found in the manufacturer\'s installation       |
|                 |     instructions (used to determine the permissible |
|                 |     points of support for vertical loads and points |
|                 |     of attachment for                               |
|                 |                                                     |
|                 | -   the anchorage system used to resist horizontal  |
|                 |     and uplift forces), and                         |
|                 |                                                     |
|                 | -   the *Appendix* section of the *CABO One and Two |
|                 |     Family Dwelling Code*.                          |
+-----------------+-----------------------------------------------------+
| c\. Foundation  | The following table lists each foundation component |
|                 | and any related requirements                        |
| Requirements    |                                                     |
|                 | for "proposed or under construction" cases.         |
+-----------------+-----------------------------------------------------+
| > 1\. Piers &   | Requirement                                         |
| > Footings      |                                                     |
+-----------------+-----------------------------------------------------+
| 2\. Concrete    | -   The load-bearing piers and footings must be of  |
| Slab or         |     sufficient size and number to distribute the    |
|                 |                                                     |
| Continuous      | -   weight of the manufactured home evenly          |
| Footings        |                                                     |
|                 | -   be of materials acceptable to the building      |
|                 |     authority having jurisdiction, and              |
|                 |                                                     |
|                 | -   (where applicable) have footings that extend    |
|                 |     below the frost line.                           |
+-----------------+-----------------------------------------------------+
| > 3\. Anchoring | Concrete slabs or continuous footings are           |
| > Devices       | acceptable in areas where their use is permitted by |
|                 | local building authorities. Steel anchorage devices |
|                 | must be cast into                                   |
|                 |                                                     |
|                 | the concrete slab or footing and be capable of      |
|                 | providing holding strength to resist                |
|                 |                                                     |
|                 | horizontal and uplift forces.                       |
+-----------------+-----------------------------------------------------+
| > 4\. Hurricane | > Anchoring devices, adequate to resist all loads,  |
| > Ties          | > must                                              |
|                 |                                                     |
|                 | -   be attached to the main frame of the unit by a  |
|                 |     bolted, welded, or mechanical connector         |
|                 |                                                     |
|                 | -   be placed at every supporting pier or as        |
|                 |     specified by the manufacturer, and              |
|                 |                                                     |
|                 | -   extend into the pier footing.                   |
|                 |                                                     |
|                 | > Anchoring straps or cables affixed to ground      |
|                 | > anchors, other than pier footings, will not meet  |
|                 | > this requirement.                                 |
+-----------------+-----------------------------------------------------+
| > 5\. Flexible  | > Properties located in Wind Zone II or III (wind   |
| > Connections   | > speeds in excess of 80 mph) must                  |
| >               | >                                                   |
| > for Seismic   | > be provided with diagonal hurricane ties that     |
| > Activity      | > have been properly engineered for                 |
|                 | >                                                   |
|                 | > the location, and comply with the requirements of |
|                 | > the building authority having jurisdiction.       |
|                 | >                                                   |
|                 | > *Important*: The installation procedures included |
|                 | > in both the manufacturer\'s foundation            |
|                 | > instructions and *NCS BCS Handbook A225.1* are    |
|                 | > not generally adequate for manufactured homes in  |
|                 | > these areas.                                      |
+-----------------+-----------------------------------------------------+
| > 6\. Permanent | > Properties located in areas of high seismic       |
| > Perimeter     | > activity require special foundation designs to    |
| > Enclosure     | > compensate for the effects of ground movement and |
|                 | > to provide flexible connections                   |
|                 | >                                                   |
|                 | > between the foundation system and the             |
|                 | > manufactured home and all utility connections.    |
|                 | >                                                   |
|                 | > Building authorities in these areas should be     |
|                 | > consulted for acceptable design                   |
|                 | >                                                   |
|                 | > features and special code requirements.           |
+-----------------+-----------------------------------------------------+
| > 7\. Moisture  | > A permanent perimeter enclosure (not "skirting")  |
| > & Humidity    | > with a continuous foundation-type footing will be |
| > Reduction     | > required only when specifically required by the   |
|                 | > local building authority. When required, it must  |
|                 | > be                                                |
|                 |                                                     |
|                 | -   designed to resist all forces which cause frost |
|                 |     heave, soil settlement, or the                  |
|                 |                                                     |
|                 | -   shrinking or swelling of expansive soils        |
|                 |     without transmitting the movement or            |
|                 |                                                     |
|                 | -   effects to the manufactured home, and           |
|                 |                                                     |
|                 | -   properly secured to the perimeter of the        |
|                 |     manufactured home to exclude entry              |
|                 |                                                     |
|                 | -   of vermin and water, and provide ventilation    |
|                 |     and a means of access to the crawl space.       |
+-----------------+-----------------------------------------------------+
|                 | > The reduction of moisture and humidity in an      |
|                 | > enclosed under floor space is                     |
|                 | >                                                   |
|                 | > required. Except in arid regions with dry soil    |
|                 | > conditions, a continuous moisture barrier that    |
|                 | > covers the natural or excavated ground surface    |
|                 | > within the perimeter enclosure of the home must   |
|                 | > be installed.                                     |
|                 | >                                                   |
|                 | > Provisions should also be made to prevent water   |
|                 | > from entering the crawl space and for the control |
|                 | > and diversion of surface water away from the      |
|                 | > manufactured home.                                |
+-----------------+-----------------------------------------------------+
| > d\. Where a   | > If the property is located in a jurisdiction      |
| > Building Code | > which enforces a State, county or local building  |
| > is Enforced   | > code, then VA MPRs require that the construction  |
|                 | > comply with the applicable State, county or local |
|                 | > building code 24 Code of Federal Regulations      |
|                 | >                                                   |
|                 | > (CFR) 200.926d, *Construction Requirements* 1992  |
|                 | > Council of American                               |
|                 | >                                                   |
|                 | > Building Officials (CABO) *Model Energy Code      |
|                 | > (MEC),* and HUD references                        |
|                 | >                                                   |
|                 | > below.                                            |
+-----------------+-----------------------------------------------------+
| e\. Where a     | If the property is located in a jurisdiction which  |
| Building Code   | does not enforce a State, county                    |
| is Not Enforced |                                                     |
|                 | or local building code, then VA MPRs require that   |
|                 | the construction comply with                        |
|                 |                                                     |
|                 | -   applicable provisions of the current *CABO      |
|                 |     International One and Two Family Dwelling       |
|                 |     Code*, and any mandatory codes or standards     |
|                 |     incorporated by reference                       |
|                 |                                                     |
|                 | -   24 CFR 200.926d, *Construction Requirements*    |
|                 |                                                     |
|                 | -   24 CFR 200.926e, *Supplemental Information for  |
|                 |     Use with CABO One and*                          |
|                 |                                                     |
|                 | *Two Family Dwelling Code* 1992 CABO *Model Energy  |
|                 | Code* *(MEC)*, and HUD references below.            |
+-----------------+-----------------------------------------------------+
| > f\. HUD       | > The following references from HUD are also        |
| > References    | > included in VA MPRs, as applicable:               |
|                 |                                                     |
|                 | -   HUD engineering bulletins and materials         |
|                 |     releases that address, the use of new or        |
|                 |     unconventional construction methods. or         |
|                 |     materials that have been reviewed and           |
|                 |     considered suitable from a technical standpoint |
|                 |     by HUD, andstandards and practices recommended  |
|                 |     in HUD Handbooks                                |
|                 |                                                     |
|                 | ```{=html}                                          |
|                 | <!-- -->                                            |
|                 | ```                                                 |
|                 | -   [Handbook 4140.1]{.underline}*, Land Planning   |
|                 |     Principles for Home Mortgage Insurance*         |
|                 |                                                     |
|                 | -   [Handbook 4140.2]{.underline}*, Land Planning   |
|                 |     Procedures and Data for Insurance for*          |
|                 |                                                     |
|                 | -   *Home Mortgage Programs*, and                   |
|                 |                                                     |
|                 | ```{=html}                                          |
|                 | <!-- -->                                            |
|                 | ```                                                 |
|                 | -   [Handbook 4140.3]{.underline}, *Land Planning   |
|                 |     > Data Sheet Handbook*                          |
+-----------------+-----------------------------------------------------+

**26. Supplemental Cost/Market Appraisal Guides**

We utilize the Residential Handbook published by Marshall and Swift of
California. The use of this data service is optional, but it will assure
uniformity in calculations when your report is reviewed by a Staff
Review Appraiser. The cost approach is not required as an approach to
determine value. However, we strongly encourage its use to support your
estimated remaining economic life and effective age relationship. Please
read VA's position concerning these two items in section 27.

The Estimated Site Value must be completed on all appraisals except
condominiums.

**THE URAR**

-   Make sure you show the date you received package & the date you mail
    package in the comments on cost approach. Timeliness is five days on
    Liquidation LGI's and LPL's. All other appraisals are to be
    completed in the timeframe that is typical for conventional
    appraisal assignments.

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```
-   Acceptable Legal Description. See paragraph 14.

-   List all repairs in a definitive way; be specific.

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```
-   List repairs in the **Comments** section on the **front** of the
    URAR.

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```
-   For subjects requiring repairs, the *Conditions of Appraisal*
    section on the **back** of the URAR should be checked "subject to
    repairs, .... " and must be annotated: "Subject to the MPR repairs
    noted in the Comments Section."

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```
-   If no repairs are required you are appraising property "as is.\"
    Make sure reconciliation portion of URAR is correctly marked.

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```
-   Cost Approach Section

> Site Value.
>
> Remaining Economic Life.

-   Fannie Mae 1073 is used for condominiums only.

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```
-   Fannie Mae Form 1025 must be used for properties with multiple
    living units. Operating and Income Statement (FNMA 216) is not
    required.

**27. Uniform Residential Appraisal Report**

[I. The Uniform Residential Appraisal Report (URAR)]{.underline}

In general, this instructional material is provided for use as a guide
to completion of the URAR form for VA Loan Guaranty purposes. In any
instances where there is a conflict with existing VA guidelines,
directives or procedures, VA's instructions will be controlling.

VA will continue to have separate appraisal requirements to supplement
the minimum requirements of USPAP because it is considered necessary to
assure that all agency concerns are addressed. Appraisers are required
to complete the URAR in compliance with outstanding VA directives & in a
way that will clearly reflect the thoroughness of the investigation &
analysis and provide the rationale for the estimate of market value.
Appraisers will go beyond any limitations of the form by providing
additional comments & exhibits when they are needed to support their
conclusions.

The "departure" provision permits limited exceptions to sections of
USPAP that are classified as specific guidelines rather than binding
requirements. For VA purposes, use of the departure provision will be
determined by VA on a case by-case basis; e.g., liquidation appraisal
updates.

*VA fee appraisers are not authorized to make the determination to use
the departure provision*.

VA has modified its appraisal standards to specifically acknowledge the
USPAP as the minimum standards of the appraisal industry, VA will
require the Freddie Mac Form 439/Fannie Mae Form 1004B to be signed and
submitted by the appraiser as an exhibit to the appraisal report form
for each appraisal assignment. Maintaining a copy \"on file" is not
consistent with USPAP. Appraisers will not be permitted to make
additions or deletions to the certification & statement of limiting
conditions form. For VA purposes, an exception to this is allowed for
those liquidation appraisal reports in which the appraiser was either
denied or unable to gain access to the subject property. Certification
number 8 may be altered to reflect this fact by lining out the word
"interior" and initialing. The appraiser will be permitted to make
additional certifications (but not limiting conditions) on a separate
form or page. Any additional certifications made by an appraiser must
not conflict with the standard certifications on Freddie Mac Form
439/Fannie Mae Form 1004B or with any of VA's policies.

For all appraisal assignments, the fee appraiser must certify in each
case that they have considered relevant competitive listings or contract
offerings in the performance of the appraisal. If time adjustments are
made or a significant market transition is indicated, the appraiser must
also provide an addendum reporting at least 3 relevant competitive
listings or contract offerings. If a stable market is indicated & there
are no time adjustments, the appraiser does not have to provide the
addendum.

VA understands that the properties you appraise are not going to be
exactly like the sample appraisal. We feel that the sample appraisal
format covers the basic requirements & that it represents property
appraisal practice. Examples will be used at times in our instructions.
Again, we feel that the instructions cover the basic requirements of VA.

The sample appraisal is based on a hypothetical property. Map, photos,
etc. were not provided. We have provided all necessary information to
support the value on the URAR. Separate addenda will be necessary to
support your real appraisals. Addenda will be necessary either for
commenting on a homeowners association; the condition of the property;
repairs; adjustments found in the Sales Comparison Analysis approach;
the correlation process or for providing more information to get the
reader to understand your report.

*[We have provided this guide to help you understand VA requirements
ONLY. We believe you are the appraisal experts and your appraisals will
reflect acceptable methodology and practices.]{.underline}*

VA will accept the URAR generated by software programs that include
expandability features that allow for increases in any areas of the form
that call for the insertion of narrative comments when the appraiser
believes this is necessary to accommodate a particular appraisal
assignment. The \"Sales Comparison Analysis\" must not be separated.
Regardless of whether the two-page format or a computer-generated
expandable format is used, the sequence of the information on the URAR,
as well as all of the specific information (including the instructions,
entries, directions, etc.), cannot be changed in any manner.

For the most part the URAR form should be self-explanatory. However,
based on our staff appraisal reviews, there appears to be a lack of
consistency and quality. We do not assume that no entry or blank areas
on either page of the form means N/A, none or no adjustment statement is
required. Make sure the VA case number is in the upper right hand corner
of all pages submitted.

-   The fee appraiser must show the VA case number after \"file no.\" in
    the upper right hand corner of the URAR & on all pages of the
    appraisal package.

-   You must show the date you received the assignment in the cost
    approach comments. All other appraisals are to be completed in the
    timeframe that is typical for conventional appraisal assignments.
    Please if you're able to complete that appraisal faster than the
    standard, do so.

-   Send appraisal packages as outlined on pages 2 and 3 of this guide.

-   The following signed certification will be required on all proposed
    cases:

> *\"I hereby certify that the information contained in the exhibits
> identified below and all condominium or Planned Unit Development
> organizational documents have been employed in arriving at the
> estimate of reasonable value noted in this report (identify plans,
> specifications and other exhibits):*
>
> \_\_

Appraiser signature Date"

-   VA requires that a legible location map be provided with every
    appraisal report indicating the location of each comparable sale and
    the subject. If necessary, draw in street locations. Computer
    generated maps are acceptable, ***if they are detailed enough to
    identify the property. Make sure they are legible.***

Only sections that VA feels need further clarification are addressed.

+------------------+---------------------------------------------------+
| **Subject        |                                                   |
| Section**        |                                                   |
+------------------+---------------------------------------------------+
| **Census tract** | Not necessary for VA purposes                     |
+------------------+---------------------------------------------------+
| **Legal          | Provide a verified legal. If it does not fit,     |
| description**    | state "see attached" & put on addenda.            |
+------------------+---------------------------------------------------+
| **               | If property is owner occupied, indicate name      |
| Owner/occupant** | twice. If you know the owner\'s                   |
|                  |                                                   |
|                  | name & it appears abandoned, you put              |
|                  | "name/abandoned.\" Please remember if property is |
|                  | abandoned, you must get into the interior. You    |
|                  | may also indicate unknown/occupied, etc.          |
+------------------+---------------------------------------------------+
| **Description    | Report your findings.                             |
| and \$**         |                                                   |
+------------------+---------------------------------------------------+
| **HOA/Mo.**      | Report fee if mandatory.                          |
+------------------+---------------------------------------------------+
| **Neighborhood   | In any case in which information in the           |
| Section**        | Neighborhood section indicates there is a market  |
|                  | transition, the fee appraiser must provide an     |
|                  | addendum providing a                              |
|                  |                                                   |
|                  | minimum of three competitive listings or contract |
|                  | offerings. A market transition                    |
|                  |                                                   |
|                  | may be considered to include: a change to an      |
|                  | oversupply/shortage of housing                    |
|                  |                                                   |
|                  | stock, marketing times/listing periods that have  |
|                  | increased/decreased significantly, change in      |
|                  | employment stability, increase in sales &         |
|                  | financing concessions by sellers, among other     |
|                  | indicators. If the comparables are less than one  |
|                  | month old, three listings are not required.       |
+------------------+---------------------------------------------------+
| **Built Up**     | This must be consistent with the entire           |
|                  | appraisal. Example: The sample                    |
|                  |                                                   |
|                  | appraisal states the neighborhood is over 75%     |
|                  | built up. The present land use section shows the  |
|                  | present land uses to be a total 95% built, 5%     |
|                  | vacant. The land use change section shows changes |
|                  | in process from vacant to developed               |
|                  |                                                   |
|                  | residential. This agrees with the "New            |
|                  | classification under age for Single               |
|                  |                                                   |
|                  | Family Housing. Predominate occupancy should be   |
|                  | self-explanatory.                                 |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| **Property       | This section is important. If you indicate        |
| Values**         | increasing or declining, you will need to         |
|                  |                                                   |
|                  | tie this section in with the market conditions    |
|                  | for the property.                                 |
|                  |                                                   |
|                  | If you mark either declining or increasing        |
|                  | property values & use somewhat dated sales in the |
|                  | Sales Comparison, you must comment as to whether  |
|                  | a negative or a positive time adjustment is       |
|                  | appropriate. REMEMBER: 3 listings must be         |
|                  |                                                   |
|                  | provided to support your opinion. Examine your    |
|                  | listings or put on a grid to make sure the        |
|                  | listings support your indicated trend.            |
|                  |                                                   |
|                  | Example #1: There is an oversupply of homes as    |
|                  | compared to somewhat limited demand. You have     |
|                  | marked declining property values & an over supply |
|                  | in the neighborhood section. You have extracted   |
|                  | sufficient data to determine that                 |
|                  |                                                   |
|                  | property values have been declining at a rate of  |
|                  | approximately 1% per month                        |
|                  |                                                   |
|                  | over the past year. You explain this trend to us  |
|                  | & adjust each comparable sale,                    |
|                  |                                                   |
|                  | on the date of sale/time line in the Sales        |
|                  | Comparison Analysis Approach at the               |
|                  |                                                   |
|                  | rate of 1% per month to the date of the           |
|                  | appraisal. This results in a negative time        |
|                  | adjustment.                                       |
|                  |                                                   |
|                  | Example #2: You are appraising the same house in  |
|                  | the same area & you still                         |
|                  |                                                   |
|                  | feel that there is an over supply of homes as     |
|                  | compared to somewhat limited demand. You again    |
|                  | mark declining property values and an oversupply  |
|                  | in the neighborhood section. Your opinion is that |
|                  | due to the oversupply & to the                    |
|                  |                                                   |
|                  | somewhat limited demand that the property values  |
|                  | are still declining. However,                     |
|                  |                                                   |
|                  | due to the lack of current and dated sales in the |
|                  | area, you have not been able to extract           |
|                  | sufficient data to establish a reliable rate of   |
|                  | decline. You cannot make a negative time          |
|                  | adjustment in this example. You would explain to  |
|                  | us your                                           |
|                  |                                                   |
|                  | conclusions.                                      |
+------------------+---------------------------------------------------+
| **Neighborhood** | Identify area based on common characteristics.    |
|                  | Provide a description of neighborhood boundaries  |
| **Boundaries &   | & characteristics. Details regarding bordering    |
| c                | street names & both physical & economic           |
| haracteristics** | characteristics typical of the neighborhood       |
|                  |                                                   |
|                  | will provide substantial details & understanding  |
|                  | regarding neighborhood composition. A location    |
|                  | map indicating subject location & comparables is  |
|                  |                                                   |
|                  | required.                                         |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| **Market         | This section is important. It not only discusses  |
| conditions in**  | the general market conditions, but it discusses   |
|                  | typical financing. The sample appraisal discusses |
| **the subject    | the \# of seller paid points typical for the      |
| neighbor-**      | market area. The amount paid was from 0-3 points. |
|                  | If the points paid on any of the sales had        |
| **hood           | exceeded 3 points, adjustments would have         |
| (including**     |                                                   |
|                  | to be made.                                       |
| **support for    |                                                   |
| the above**      | Example: If 6 points had been paid on sales #1, a |
|                  | minus 3 point (3% of the loan amount) adjustment  |
| **conclusions    | would be made. This represents the difference     |
| related to the   | between the maximum number of points (3) that are |
| trend of         | typically paid in this market area.               |
| property values, |                                                   |
| demand/supply, & | In the sample, the seller of comparable #1 paid   |
| marketing        | 2.5 points, typical for the area &                |
| time...**        |                                                   |
|                  | no adjustment was made.                           |
|                  |                                                   |
|                  | VA requires fee appraisers to report, the         |
|                  | existence or nonexistence of sales or financing   |
|                  | concessions in the subject\'s market area & make  |
|                  | a statement regarding their effect, if any, on    |
|                  | the sales prices of comparable homes. That        |
|                  | statement                                         |
|                  |                                                   |
|                  | must be made in the Neighborhood section or on an |
|                  | addendum. Fee appraisers must provide the         |
|                  | following General Market Information in this      |
|                  | section, or an addendum:                          |
|                  |                                                   |
|                  | -   Indicate to what extent the average marketing |
|                  |     time (listing period) in the subject\'s       |
|                  |     competing market area is ***expanding or      |
|                  |     contracting*** ***or stable***                |
|                  |                                                   |
|                  |     (e.g., in the last 3 months the listing       |
|                  |     period in the subject\'s market area has      |
|                  |     decreased from 180 days to 90 days);          |
|                  |                                                   |
|                  |     and                                           |
|                  |                                                   |
|                  | -   Average listing price to sales price ratio    |
|                  |     (appraiser will use professional judgment to  |
|                  |     estimate the ratio if it cannot be determined |
|                  |     from available data sources).                 |
|                  |                                                   |
|                  | Review & analysis of competitive listings &/or    |
|                  | contract offerings is considered a basic part of  |
|                  | the research involved in the appraisal process.   |
|                  | It is essential in ensuring that the final value  |
|                  | estimate is fully reflective of any trends        |
|                  | (positive or negative) existing as of the         |
|                  | effective date of the appraisal. This process is  |
|                  | recognized in appraisal texts & is a generally    |
|                  | accepted industry practice. This is especially    |
|                  | important given the no-money-down feature of many |
|                  | VA loans. Fee appraisers must be reviewing &      |
|                  | analyzing this information in order to reconcile  |
|                  |                                                   |
|                  | the closed sales data with current market         |
|                  | conditions & to assist in making appropriate time |
|                  | adjustments.                                      |
|                  |                                                   |
|                  | Fee appraisers must make the following statement  |
|                  | in the narrative area of the Neighborhood section |
|                  | in all origination appraisal assignments:         |
|                  |                                                   |
|                  | ***[\"I have considered relevant competitive      |
|                  | listings &/or contract offerings                  |
|                  | in]{.underline}***                                |
|                  |                                                   |
|                  | ***[the performance of this appraisal & in the    |
|                  | trending information reported in this section. If |
|                  | a trend is indicated, I have attached an          |
|                  | addendum]{.underline}***                          |
|                  |                                                   |
|                  | ***[providing relevant competitive                |
|                  | listing/contract offering data.\"]{.underline}*** |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| **PUD Section**  | This section will be completed by VA fee          |
|                  | appraisers, as appropriate. A PUD is a project    |
|                  | that includes common property & improvements are  |
|                  | owned & maintained by an HOA for the use &        |
|                  | benefit of the individual units in the project. A |
|                  | project is classified as a PUD if each individual |
|                  | unit owner is automatically a mandatory member of |
|                  | the owner\'s association & is obligated to pay    |
|                  | mandatory assessments. (Zoning is not considered  |
|                  | to be a basis for classifying a project as a      |
|                  | PUD.). VA does not require approval of PUD's. You |
|                  | will not need to obtain a VA approved PUD ID.     |
+------------------+---------------------------------------------------+
| **Single Family  | This section should show the typical low & high   |
| Housing**        | price & age ranges for the neighborhood. It       |
|                  | should also show the predominate price & age for  |
|                  | the neighborhood. It should not reflect unusual   |
|                  | properties in the area. Make sure that your       |
|                  | subject fits into the ranges. If it does not,     |
|                  | comments to explain this must be included.        |
|                  |                                                   |
|                  | Example: The sample appraisal shows a price range |
|                  | from \$100,000 to \$400,000 & age range from new  |
|                  | to 20 years. There is a 70 year old, 15,000       |
|                  | square foot mansion in the immediate neighborhood |
|                  | worth \$1,000,000. The property is not typical    |
|                  | for the area & would not be included in the       |
|                  | neighborhood price & age range. A 500 square      |
|                  | foot, 1 bedroom home, 60 years old & worth        |
|                  | \$30,000 also would not be typical for this area  |
|                  | & would not be included in the neighborhood price |
|                  | & age range.                                      |
|                  |                                                   |
|                  | The subject property is located in the            |
|                  | neighborhood & it should normally fall within the |
|                  | price & age range for the neighborhood. If it     |
|                  | should not fall within the age & price ranges for |
|                  | the neighborhood, an explanation must be          |
|                  | provided.                                         |
+------------------+---------------------------------------------------+
| **Site Section** | If this section is completed in a manner similar  |
|                  | to the section in the sample appraisal, it should |
|                  | be acceptable. There are a few specific areas     |
|                  | that should be pointed out.                       |
|                  |                                                   |
|                  | Site comments - This section gives you an         |
|                  | opportunity to tell us about the site. Your       |
|                  | comments are important & the section should be    |
|                  | used.                                             |
+------------------+---------------------------------------------------+
| **Dimensions,    | The subject property is on a cul-de-sac. Notice   |
| Site Area,       | under corner lot, it says "no". It also states    |
| corner lot,      | cul-de-sac. The second sentence in the comments   |
| landscaping,     | section, at the bottom of the page refers to the  |
| etc.**           | cul-de-sac site being a premium in this area. In  |
|                  | the Sales Comparison Analysis approach the        |
|                  | appraiser noted that the subject, sales #1 &      |
|                  | sales 3 each were located on a cul-de-sac. Sale   |
|                  | #2 was not & an adjustment was made accordingly.  |
|                  | Notice that a clock sprinkler system was noted    |
|                  | under landscaping in the site section, under      |
|                  | additional features in the comments section at    |
|                  | the bottom of the page & in the Sales Comparison  |
|                  | Analysis approach.                                |
+------------------+---------------------------------------------------+
| **Drainage**     | Any remark indicating that the subject site       |
|                  | drainage is less than adequate requires an        |
|                  | explanation.                                      |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| **FEMA Special   | In every instance in which a property can be      |
| flood**          | located on a flood map, the map number & flood    |
|                  | zone must be provided. If the area is not mapped, |
| **hazard area,   | indicate "not mapped".                            |
| FEMA zone, map   |                                                   |
| date & \#**      | If property is located in designated special      |
|                  | flood hazard area & the community is NOT          |
|                  | PARTICIPATING in the Flood Insurance Program, do  |
|                  | not appraise the property, but return the request |
|                  | with your comments. A property in a designated    |
|                  | special flood hazard area is not eligible for a   |
|                  | VA guaranteed loan unless flood insurance is      |
|                  | available.                                        |
+------------------+---------------------------------------------------+
| **Off-site       | In the case of a project with a mandatory         |
| improvements**   | homeowners association, you may have both private |
|                  | & public site improvements. If you do, place an X |
|                  | in both the public & the private boxes.           |
+------------------+---------------------------------------------------+
| **Description of |                                                   |
| Improvements     |                                                   |
| Section**        |                                                   |
+------------------+---------------------------------------------------+
| **General        | a\. 3 level & 4 level split level homes are 3     |
| Description**    | level & 4 level. They are not 1½ story homes. The |
|                  | basement level (completely below ground) counts   |
|                  | as a level, but finished area in the basement     |
|                  | does not count in either the gross living area,   |
|                  | nor in the total number of rooms, including       |
|                  | bathrooms. Sales used in the Sales Comparison     |
|                  | Analysis approach may make it necessary           |
|                  |                                                   |
|                  | to adjust the finish of the upper levels & the    |
|                  | finish of the lower level separately. If this is  |
|                  | necessary, the method of the adjustments must be  |
|                  | explained thoroughly.                             |
|                  |                                                   |
|                  | b\. Existing/Proposed - All appraisals as New     |
|                  | Construction should be listed as existing         |
|                  | properties.                                       |
|                  |                                                   |
|                  | A relationship should exist between effective     |
|                  | age, economic life & remaining economic life.     |
|                  | Estimated remaining economic life will be         |
|                  | discussed in the Cost approach. We will explain   |
|                  | the method used to arrive at these various        |
|                  | numbers in the sample appraisal. Even though the  |
|                  | VA does not require a Cost Approach, we are going |
|                  | to carry this method one step further to include  |
|                  | the estimated physical depreciation based on the  |
|                  | age-life method. The method used in the sample    |
|                  | appraisal is well accepted by the lending         |
|                  | community.                                        |
+------------------+---------------------------------------------------+
| **Effective      | The effective age of a property takes into        |
| Age**            | consideration its condition, design & the         |
|                  | economic forces that affect its value. The        |
|                  | physical condition of the property is important.  |
|                  | Through proper updating the life of the physical  |
|                  | elements are extended & the effective age of the  |
|                  | property does not age year for year. An older     |
|                  | property will probably have an older design than  |
|                  | a new property. The older design of the older     |
|                  | property in its neighborhood may have good market |
|                  | acceptance & it may have a positive affect on the |
|                  | value of the property. In this case the older     |
|                  | design will not result in the effective age of    |
|                  | the property aging year for year. The economic    |
|                  | forces that affect the value of the property seem |
|                  | to be the most important element in determining   |
|                  | the effective age of the property. Positive       |
|                  | economic forces, such as strong demand, for an    |
|                  | older property in an older neighborhood will not  |
|                  | result in the effective age of the property aging |
|                  | year for year.                                    |
|                  |                                                   |
|                  | Example: A 60 year old property, with average     |
|                  | maintenance & updating is located in an older     |
|                  | neighborhood. It has strong demand & a limited    |
|                  | supply of available properties. Due to the strong |
|                  | economic forces this property may be deemed to    |
|                  | have an effective age of 10-15 years. The house   |
|                  | in the sample appraisal is 14 years old and it is |
|                  | deemed to have an effective age of 7 years.       |
|                  |                                                   |
|                  | Let's discuss economic life and remaining         |
|                  | economic life.                                    |
|                  |                                                   |
|                  | Economic life is the total period of time that    |
|                  | the improvements contribute value to the          |
|                  | property. In the sample appraisal the appraiser   |
|                  | assumed that the subject house, if new, would     |
|                  | have had a 60 year economic life.                 |
|                  |                                                   |
|                  | Remaining economic life is the period of time     |
|                  | from the date of the appraisal to the end of the  |
|                  | house's economic life.                            |
|                  |                                                   |
|                  | We can now discuss the relationship between       |
|                  | effective age, economic life & remaining economic |
|                  | life.                                             |
|                  |                                                   |
|                  | In the sample appraisal the appraiser established |
|                  | the relationship by subtracting the effective age |
|                  | (7 years) from the economic life (60 years) to    |
|                  | arrive at a 53 year remaining economic life.      |
|                  |                                                   |
|                  | VA does not require a cost approach to support    |
|                  | value. However, we will carry this a step further |
|                  | to illustrate the calculation of estimated        |
|                  | physical depreciation based on the age-life       |
|                  | method. If the appraiser had used the age-life    |
|                  | method, in a cost approach he would have divided  |
|                  | the effective age (7 years) by the economic life  |
|                  | (60 years) to arrive at 12% (rounded) estimated   |
|                  | physical depreciation.                            |
|                  |                                                   |
|                  | An accurate estimate of remaining economic life   |
|                  | is important as it could affect the terms of the  |
|                  | loan. A logical relationship between effective    |
|                  | age, economic life and remaining economic life is |
|                  | important for property appraisal practice.        |
+------------------+---------------------------------------------------+
| **Foundation**   | If you have a partial basement, the rest of the   |
|                  | house has to be over something. It could be over  |
|                  | a crawl space or on a slab. In the sample         |
|                  | appraisal the house had a partial basement and a  |
|                  | partial crawl space. The slab that is shown as    |
|                  | below grade is the basement floor. The only       |
|                  | exception to this would be cantilevers. Say "yes" |
|                  | or "no" for a sump pump.                          |
|                  |                                                   |
|                  | Also, any affirmative remark concerning dampness, |
|                  | settlement or infestation requires an             |
|                  | explanation.                                      |
+------------------+---------------------------------------------------+
| **Room list**    | Make sure the front side and back side of URAR    |
|                  | match for above grade room counts.                |
+------------------+---------------------------------------------------+
| **Condition of   | If appraisal is "subject to repairs", repairs     |
| im               | must be listed here. If there are no              |
| provements\...** | inadequacies, please state.                       |
+------------------+---------------------------------------------------+
| **Adverse        | The "comments" portion of this section includes   |
| environmental    | entry where the appraiser must address adverse    |
| conditions ...** | environmental conditions (such as, but not        |
|                  | limited to, hazardous wastes, toxic substances,   |
|                  | etc.) that are present in the improvements, on    |
|                  | the site, or in the immediate vicinity of the     |
|                  | subject property. This clarifies the appraiser's  |
|                  | responsibility to report what he/she became aware |
|                  | of through the inspection of the property and the |
|                  | normal research involved in performing the        |
|                  | appraisal.                                        |
+------------------+---------------------------------------------------+
| **Cost           | The cost approach is not necessary to support     |
| Approach**       | value. However, the appraiser must provide an     |
|                  | estimated site value on all appraisals except on  |
|                  | condominium units. Units in condominium projects  |
|                  | do not have a separate site value since the       |
|                  | interest in a unit is undivided.                  |
|                  |                                                   |
|                  | This approach is often used for the support of    |
|                  | the Effective Age/Remaining economic life         |
|                  | relationship.                                     |
|                  |                                                   |
|                  | Some of you will still want to use a cost         |
|                  | approach. We view this positively. Make sure that |
|                  | the cost approach is consistent with the Sales    |
|                  | Comparison Analysis approach & with other         |
|                  | comments made on the appraisal package.           |
+------------------+---------------------------------------------------+
| **Comments**     | Estimated remaining economic life stated in this  |
|                  | section. Also required are the date you receive   |
|                  | appraisal & the date you mail appraisal to VA or  |
|                  | LAPP lender. If dates are not noted a timeliness  |
|                  | error may be taken against you.                   |
+------------------+---------------------------------------------------+
| **Sales          | This approach provides the most reliable          |
| Comparison       | indication of value for VA purposes. Other        |
| Analysis         | approaches may be used to support the Sales       |
| Approach**       | Comparison Analysis approach. Their relevance     |
|                  | must be discussed in your final reconciliation.   |
|                  |                                                   |
|                  | The selection of the best comparable sales is a   |
|                  | critical step. We use these sales and sales       |
|                  | provided by a third party in our process for      |
|                  | reconsideration of value. You need to watch the   |
|                  | magnitude of the adjustments by comparing each    |
|                  | one to the sales price. Single line adjustments   |
|                  | should not exceed 10% of the sales price. Total   |
|                  | net adjustments of each comparable should not     |
|                  | exceed 15% of the sales price. All adjustments    |
|                  | when ignoring the signs, should not exceed 25% of |
|                  | the sales price. These are fairly standard        |
|                  | guidelines. Adjustments exceeding these           |
|                  | percentages must be thoroughly explained.         |
|                  |                                                   |
|                  | VA considers the research, review & analysis of   |
|                  | competitive listings & contract offerings to be a |
|                  | necessity & a significant consideration in the    |
|                  | appraisal process.                                |
|                  |                                                   |
|                  | If you make an adjustment to Date of Sale/Time, 3 |
|                  | relevant competitive listings or contracts are    |
|                  | required.                                         |
+------------------+---------------------------------------------------+
| **Proximity to   | Show in both distance & direction (Comparable #2  |
| Subject**        | shows 2 blocks south & 3 blocks West). This is    |
|                  | not "as the crow flies". Sales located outside    |
|                  | the established neighborhood boundaries &         |
|                  | characteristics must be explained.                |
+------------------+---------------------------------------------------+
| **Data Source**  | The sample appraisal shows two sources for each   |
|                  | sale. Typical sources are MLS sold data,          |
|                  | listing/selling agent, county records or the      |
|                  | title company.                                    |
+------------------+---------------------------------------------------+
| **Sales or       | Our sample appraisal shows the type of financing, |
| Financing        | the loan amount (%), interest rate & the number   |
| concessions**    | of seller paid points. All the sales had new      |
|                  | financing. As explained in market conditions      |
|                  | section of this guide, the points paid on the     |
|                  | comparable sales in the sample appraisal fell     |
|                  | within the typical range for the market area &    |
|                  | therefore no adjustment was necessary. The market |
|                  | conditions section also gave an example of an     |
|                  | adjustment that would be made if excess points    |
|                  | had been paid.                                    |
|                  |                                                   |
|                  | Positive adjustments for terms are not            |
|                  | appropriate. If you must use any type of sale,    |
|                  | that you feel sold below its value due to terms   |
|                  | of financing, it may adjust considerably lower    |
|                  | than the other sales. You should explain the      |
|                  | reason you used it & why it came in lower         |
|                  | probably give it less consideration in the final  |
|                  | reconciliation.                                   |
|                  |                                                   |
|                  | We do not want an appraiser to use sales with     |
|                  | assumption terms due to the difficulty in         |
|                  | adjusting for those terms. We realize that this   |
|                  | may be necessary. Differences in financing terms  |
|                  | are treated the same as differences in property   |
|                  | characteristics. If you use a mathematical method |
|                  | to arrive at a dollar amount adjustment this      |
|                  | should be reduced to points (%) to determine if   |
|                  | the points exceed those typical for the market    |
|                  | area & if so an adjustment should be made. If the |
|                  | points (%) fall into a typical range, no          |
|                  | adjustment is warranted.                          |
|                  |                                                   |
|                  | Remember financing adjustments are made to        |
|                  | current market terms, not to the subject          |
|                  | property. Financing adjustments must              |
|                  | *[always]{.underline}* be explained.              |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| **Date of        | Refer to property values section of this guide.   |
| Sale/Time**      | It is important that you make time adjustments    |
|                  | for increasing or decreasing property values.     |
|                  | Adjustments must be made when sufficient data is  |
|                  | available to establish these trends. You should   |
|                  | explain your method for making time adjustments   |
|                  | (1%/month, \$300/month etc.).                     |
|                  |                                                   |
|                  | In the sample appraisal, we stated that we felt   |
|                  | that property values were stable in the subject   |
|                  | neighborhood. We did not make a time adjustment.  |
|                  | Sales used all took place within the past six     |
|                  | months. Explain the use of sales over six months  |
|                  | old.                                              |
|                  |                                                   |
|                  | Example: Sale #1, though somewhat dated, is a     |
|                  | very comparable property in the same defined      |
|                  | neighborhood. Values have remained stable in this |
|                  | area since the date of the sale. Sale #1 provides |
|                  | a reliable current indication of value. (This     |
|                  | does not pertain to Sale #1 in the sample         |
|                  | appraisal.)                                       |
+------------------+---------------------------------------------------+
| **Location**     | Enter the subdivision name & rating for the       |
|                  | subject & all of the comparable sales. In the     |
|                  | sample appraisal, we said "A Subd/Avg". This      |
|                  | shows the name of the subdivision & that we felt  |
|                  | that it is average for the area. We also felt     |
|                  | that all of the comparable sales were in similar  |
|                  | locations & therefore no adjustments were made.   |
|                  | If any of the comparable sales is in either an    |
|                  | inferior or a superior location, an adjustment    |
|                  | would be made.                                    |
|                  |                                                   |
|                  | Example: Assume the subject & comparables #1 & #3 |
|                  | were all in the same subdivision & therefore      |
|                  | their locations were felt to be comparable. Now   |
|                  | we will assume that sale #2 is a very comparable  |
|                  | home in an adjoining subdivision has a very       |
|                  | active homeowners association that owns &         |
|                  | maintains a recreation facility & landscaped      |
|                  | greenbelts. By using matched pairs of sales from  |
|                  | both subdivisions, we found that buyers were      |
|                  | willing to pay more for a home in the subdivision |
|                  | with the homeowners association. Therefore, we    |
|                  | determined that the location of sale #2 was       |
|                  | superior to the subject. We then extract a dollar |
|                  | difference & make a negative adjustment to sale   |
|                  | #2. (This does not pertain to Sale #2 in the      |
|                  | sample appraisal.)                                |
+------------------+---------------------------------------------------+
| **Site/View**    | In the sample appraisal we referred to the        |
|                  | subject being located on a                        |
|                  |                                                   |
|                  | cul-de-sac in the site section. We again          |
|                  | mentioned the cul-de-sac, in the comments section |
|                  | on the bottom of the front page on the sample     |
|                  | appraisal. We stated that a cul-de-sac location   |
|                  | is felt to be a premium in this area. The subject |
|                  | & sales #1 & #3 all had similar cul-de-sac        |
|                  | locations. Sale #2 was in an average location     |
|                  | that was felt to be inferior to the subject       |
|                  | cul-de-sac location. After comparing other sales, |
|                  | we felt that a plus \$2000 adjustment was         |
|                  | appropriate for sale #2 for being on an inferior  |
|                  | site.                                             |
|                  |                                                   |
|                  | We did not make this adjustment on the location   |
|                  | line because we feel that it is necessary to      |
|                  | separate the general property location from the   |
|                  | more specific site location.                      |
|                  |                                                   |
|                  | All of the sites in the sample appraisal were     |
|                  | considered average for the area. The only         |
|                  | difference was sale #2 not having a cul-de-sac    |
|                  | location.                                         |
|                  |                                                   |
|                  | Therefore, we made the adjustment to sale #2      |
|                  | under view. We realize that a cul-de-sac location |
|                  | adjustment may have nothing to do with a superior |
|                  | view. However, this gave us a place to make this  |
|                  | adjustment.                                       |
|                  |                                                   |
|                  | We feel that this "Site/View" slot is an          |
|                  | appropriate place to mention anything that is     |
|                  | specific to the site. This could include a        |
|                  | traffic adjustment, a Mountain View adjustment, a |
|                  | site size adjustment 100x125 or 2 Acres), a       |
|                  | cul-de-sac site, etc.                             |
+------------------+---------------------------------------------------+
| **Design &       | You should use the same style home whenever       |
| Appeal**         | possible. You must explain why it is necessary to |
|                  | use a ranch style comparable sale when the        |
|                  | subject is a two story etc. Be consistent with    |
|                  | the front side of the appraisal form.             |
+------------------+---------------------------------------------------+
| **Quality of     | The quality was felt "average" for all of the     |
| Construction**   | homes in the sample appraisal. However, it may be |
|                  | necessary to make quality adjustments.            |
|                  |                                                   |
|                  | Example #1: Assume the subject & comparables #1 & |
|                  | #2 are average quality brick homes (Avg/Brk). Now |
|                  | we will assume that comparable #3 is an average   |
|                  | quality frame home (Avg/Frm). Sales in this area  |
|                  | show you that buyers pay more for brick homes     |
|                  | than frame homes. After comparing other sales, we |
|                  | found that a plus \$1000 adjustment is            |
|                  | appropriate to sale #3 for being inferior frame   |
|                  | construction. (This does not pertain to Sale #3   |
|                  | in the sample appraisal.)                         |
|                  |                                                   |
|                  | Example #2: Assume the subject & comparables #1 & |
|                  | #3 have shake shingle roof (avg/shake). Now we    |
|                  | will assume that comparable #2 has an asphalt     |
|                  | single roof (Avg/AsphSh). Sales in this area show |
|                  | you that buyers pay more for homes with shake     |
|                  | shingle roofs than asphalt shingle roofs. After   |
|                  | comparing other sales, we found that a plus       |
|                  | \$2000 adjustment is appropriate to sale #2 for   |
|                  | having an inferior asphalt shingle roof. (This    |
|                  | does not pertain to the sample appraisal.)        |
+------------------+---------------------------------------------------+
| **Age**          | Age adjustments should be explained (\$500/year   |
|                  | etc).                                             |
+------------------+---------------------------------------------------+
| **Condition**    | The method used on sample appraisal is            |
|                  | acceptable. Large djustments must be explained.   |
+------------------+---------------------------------------------------+
| **Above Grade    | Only above grade rooms & living areas are to be   |
| Room Count &     | included on these lines. The finished area in the |
| Gross Living     | lower level of a bi-level or a split level home,  |
| Area**           | which is usually approximately half out of the    |
|                  | ground, is to be included in the gross living     |
|                  | area, in the total number of rooms, & in the      |
|                  | total number of bathrooms. The subject or the     |
|                  | comparable sales may make it necessary to adjust  |
|                  | the finish of the upper levels & the finish of    |
|                  | the lower level separately. Should this be        |
|                  | necessary, the method of the adjustments must be  |
|                  | explained thoroughly. [Basement bathrooms are not |
|                  | to be included in this section.]{.underline} They |
|                  | are to be included in the basement section.       |
|                  |                                                   |
|                  | [Only adjustments for bathrooms are to be made on |
|                  | the Room Count line.]{.underline}                 |
|                  |                                                   |
|                  | Gross Living Area line is to be used for          |
|                  | adjusting for significant differences in the      |
|                  | above ground square footage. A 20 square foot     |
|                  | difference in a 1500 square foot house is         |
|                  | probably not significant & no adjustment would    |
|                  | appear appropriate.                               |
|                  |                                                   |
|                  | [We feel that the comparable sales should all be  |
|                  | adjusted at the same rate per square foot for     |
|                  | size.]{.underline} Normally this adjustment would |
|                  | be rounded to the nearest \$100. Other items that |
|                  | affect the sales prices per square foot are       |
|                  | adjusted in other places. Should you feel that it |
|                  | is necessary to adjust the sales at different     |
|                  | rates per square foot, the adjustments must be    |
|                  | thoroughly explained.                             |
|                  |                                                   |
|                  | In the sample appraisal, we adjusted sales #1 &   |
|                  | #3 at the rate of \$25/SF (rounded) for size.     |
|                  |                                                   |
|                  | Typically, an appraiser will not make an          |
|                  | adjustment for square footage differences & also  |
|                  | make an adjustment for a difference in rooms      |
|                  | (except bathrooms). An example where it could     |
|                  | occur is a very large home with a small room      |
|                  | count.                                            |
|                  |                                                   |
|                  | Should you need to make a separate adjustment for |
|                  | rooms, it can be made on the Functional Utility   |
|                  | line below the basement section. Separate room    |
|                  | adjustments must be explained.                    |
+------------------+---------------------------------------------------+
| **Basement &     | If this section is completed in a manner similar  |
| Finished Rooms   | to the sample appraisal, it will be acceptable.   |
| Below Grade**    | Sale #1 was adjusted a plus \$3000 for not having |
|                  | a walk out basement & the Sale #3 basement finish |
|                  | adjustment was explained in the comments section. |
|                  | The basement size, on Sale #3, was adjusted at a  |
|                  | rate of \$5per square foot. The basement area     |
|                  | square footage should be shown whenever possible. |
+------------------+---------------------------------------------------+
| **Functional     | As previously stated, an adjustment for room      |
| Utility**        | differences could be made on this line. Also, any |
|                  | form of functional obsolescence found in the      |
|                  | subject or in the comparable sales would require  |
|                  | adjustment on this line. This must be consistent  |
|                  | with the data on page 1 & with the cost approach  |
|                  | (if used).                                        |
+------------------+---------------------------------------------------+
| **H              | If you feel that the heating system in a          |
| eating/Cooling** | comparable sale is either superior or inferior to |
|                  | the heating system in the subject property an     |
|                  | adjustment should be made. This is also true of   |
|                  | any cooling systems. In the sample appraisal, the |
|                  | subject & sales #2 & #3 all had central air       |
|                  | conditioning. A plus adjustment was made to sale  |
|                  | #1 for not having central air conditioning.       |
+------------------+---------------------------------------------------+
| **               | If this is completed in a manner similar to the   |
| Garage/Carport** | sample appraisal, it should be acceptable.        |
+------------------+---------------------------------------------------+
| **Porches,       | If this is completed in a manner similar to the   |
| Patio, Pools,    | sample appraisal, it should be acceptable.        |
| etc.**           |                                                   |
+------------------+---------------------------------------------------+
| **Special        | Adjustments could be made for storm windows,      |
| Energy**         | solar systems, etc.                               |
|                  |                                                   |
| **Efficient      |                                                   |
| Items**          |                                                   |
+------------------+---------------------------------------------------+
| **Fireplaces**   | Adjustments could be made for differences in the  |
|                  | number of fireplaces, wood burning stoves, etc.   |
+------------------+---------------------------------------------------+
| **Other**        | Itemize any items requiring adjustments.          |
+------------------+---------------------------------------------------+
| **Net. Adj.      | Check either the (+) or (-) box to indicate if    |
| (total)**        | the total net adjustments will increase or        |
|                  | decrease the sales price. Enter the total net     |
|                  | amount.                                           |
+------------------+---------------------------------------------------+
| **Indicated      | Add or subtract the total adjustments from the    |
| Value of         | sales price of each comparable.                   |
| Subject**        |                                                   |
+------------------+---------------------------------------------------+
| **Comments**     | See sample appraisal. Comments are almost always  |
|                  | necessary to explain some of the individual item  |
|                  | adjustments, financing adjustments, or the lack   |
|                  | of financing adjustments, & the reconciliation of |
|                  | the adjusted sales prices into a final value      |
|                  | estimate.                                         |
+------------------+---------------------------------------------------+
| **Date , Price & | Prior sales of the comparables should be provided |
| Data**           | in each case to the extent that information is    |
|                  | reasonably available in the marketplace. (Note:   |
| **Source for     | The data source for the prior sales of the        |
| prior sales      | subject & comparables does not have to be the     |
| within year of   | same as the appraiser's data &/or verification    |
| appraisal**      | source reported at the type of the adjustment     |
|                  | grid.)                                            |
|                  |                                                   |
|                  | Analysis is used as a narrative comment for any   |
|                  | prior sales of the subject property & the         |
|                  | comparables, as well as any current agreement of  |
|                  | sale, option, or listing of the subject property  |
|                  | (to assure consistency with the Uniform           |
|                  | Standards).                                       |
+------------------+---------------------------------------------------+
| **Indicated      | This approach is required on income producing     |
| Value by Income  | properties having 2 or more living units.         |
| Approach**       |                                                   |
|                  | For VA purposes, it is the process of multiplying |
|                  | the Estimated Market Rent of the subject property |
|                  | by a Gross Rent Multiplier (GRM) to arrive at an  |
|                  | indicated value. The sales price of each          |
|                  | comparable sale is adjusted by the actual rent    |
|                  | (at the time of sale) of the comparable sale to   |
|                  | arrive at a GRM for each comparable sale. A       |
|                  | reconciliation process, similar to the process    |
|                  | used in the Sales Comparison Analysis Approach,   |
|                  | is then applied to arrive at the GRM that is used |
|                  | in this approach.                                 |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| **               | Check "as is" if the property is considered to    |
| Reconciliation** | meet VA MPR's with no repairs or "subject to      |
|                  | repairs" if MPR repairs are considered necessary. |
|                  | If repairs are recommended, the condition of      |
|                  | appraisal narrative area of the reconciliation    |
|                  | section must be noted with the statement "Subject |
|                  | to the MPR repairs noted in the Comments Section  |
|                  | under condition of improvements, depreciation ... |
|                  | section". (front-side of the URAR). Only make     |
|                  | repair recommendations for items that do not      |
|                  | comply with the MPR's. The property should be     |
|                  | safe, sanitary & structurally sound. The          |
|                  | appraiser is to provide an estimated cost for     |
|                  | every recommended repair on a liquidation         |
|                  | appraisal. An estimated cost must be provided for |
|                  | all exterior repairs & for on-site improvements   |
|                  | for New Construction and Proposed. This           |
|                  | information is necessary when considering         |
|                  | escrows. The reconciliation of the adjusted price |
|                  | of each comparable, into a final value estimate   |
|                  | for the appraised property, **[is a critical step |
|                  | .]{.underline}** In the appraisal process this    |
|                  | estimate will be used as the main basis of the    |
|                  | final value estimate. The reconciliation          |
|                  | considers the amount & support of each            |
|                  | adjustment. If there is a large spread in         |
|                  | adjusted prices, you could expand the data search |
|                  | & repeat the whole process to obtain better       |
|                  | results.                                          |
|                  |                                                   |
|                  | The date of the sale, the financing terms, the    |
|                  | conditions of the sale, the location of the sale  |
|                  | & the physical similarities of the sale are all   |
|                  | taken into consideration in the final reconciling |
|                  | of the data.                                      |
|                  |                                                   |
|                  | One of the sales may provide a much more reliable |
|                  | indication of value than any of the others.       |
|                  | Possibly It is the most recent sale in a          |
|                  | comparable location & it may have required the    |
|                  | least amount of adjustment. In this case, you     |
|                  | would give it the greatest consideration & the    |
|                  | indicated value (rounded) would be based on that  |
|                  | sale.                                             |
|                  |                                                   |
|                  | That sale may have the highest or the lowest      |
|                  | adjusted sales price. It may be in the middle.    |
|                  | It's position as compared to the other two sales  |
|                  | doesn't matter. It provides the most reliable     |
|                  | indication of value & is given the greatest       |
|                  | consideration in arriving at the indicated value. |
|                  |                                                   |
|                  | Example: Sale #1 is the above sale. It has an     |
|                  | adjusted sales price of \$78,500. Sale #2 has an  |
|                  | adjusted sales price of \$74,500. Sale #3 has an  |
|                  | adjusted sales price of \$82,500. The subject     |
|                  | sales price is \$76,500.                          |
|                  |                                                   |
|                  | Since Sale #1 was given the greatest              |
|                  | consideration, the indicated value of the subject |
|                  | property should be in the proximity of \$78,500.  |
|                  |                                                   |
|                  | It is not \$76,500 because that is the sales      |
|                  | price.                                            |
|                  |                                                   |
|                  | It is also not \$78,500 because the indicated     |
|                  | values of all of the sales were averaged. You     |
|                  | **NEVER** average the adjusted sales prices to    |
|                  | arrive at an indicated value.                     |
|                  |                                                   |
|                  | You may find that 2 of the sales provide a        |
|                  | reliable indication of value & the other sale was |
|                  | used because it was the next best available sale. |
|                  | In this case, the greatest consideration is given |
|                  | to the two strongest sales.                       |
|                  |                                                   |
|                  | You may find that all of the sales, provide an    |
|                  | equally reliable indication of value. In this     |
|                  | case you would give equal consideration to all    |
|                  | the sales & the indicated value would be          |
|                  | somewhere between their adjusted sales prices.    |
|                  |                                                   |
|                  | Explain your reconciliation. An indicated value   |
|                  | that is out of the range of the adjusted sales    |
|                  | prices is unacceptable.                           |
+------------------+---------------------------------------------------+

**29. Appeals**

a\. Official requests for reconsideration of value will be sent to you
by either VA or the lender. Any increase in a value estimate during the
CRV, LAPP NOV, or MCRV validity period must be supported by real estate
market or other valid data that would be considered adequate &
reasonable by professional appraisal standards. Generally, requests for
reconsideration of value will be submitted by the requester to VA or the
LAPP lender for processing. As an optional procedure, VA allows the
requester to send written requests for reconsideration directly to the
fee appraiser who completed the original report. The requester will
include any market data to support their written request. Upon receipt
of the request, the fee appraiser must indicate the date request was
received.

If the Fee appraisers recommends an increase, page 2 of the URAR must be
completed. If the recommendation is "no increase" a narrative report is
required.

LAPP SAR's cannot increase values by more than 2%.

We have provided a table to help you with disbursement of your
recommendations. You are not permitted to issue any endorsements to the
CRV or NOV or otherwise inform the requester of your recommendations.

+----------------------+--------------+-----------+--------------------+
| Recon Request from:  | Increase     | No        | Respond to:        |
|                      |              | increase  |                    |
+----------------------+--------------+-----------+--------------------+
| VA                   | Page 2 of    | narrative | VA                 |
|                      | URAR         |           |                    |
+----------------------+--------------+-----------+--------------------+
| Non LAPP Lender      | Page 2 of    | narrative | VA                 |
|                      | URAR         |           |                    |
+----------------------+--------------+-----------+--------------------+
| LAPP Lender          | Page 2 of    | narrative | If no value        |
|                      | URAR         |           | increase or        |
|                      |              |           | increase is less   |
|                      |              |           | than 2% - send to  |
|                      |              |           | SAR;               |
|                      |              |           |                    |
|                      |              |           | If value increase  |
|                      |              |           | is more than 2%    |
|                      |              |           | send to VA;        |
+----------------------+--------------+-----------+--------------------+

-   **You must submit your written response to requests for
    reconsideration within the maximum of seven (7) calendar days in all
    cases.**

b\. Do [not]{.underline} discuss your recommendations with anyone except
VA or the LAPP SAR. Do [not]{.underline} give your response to a
veteran, seller, realtor, or other interested party to hand-deliver.
Your recommendation must be reviewed by VA or the LAPP SAR & is subject
to change.

c\. If the new information is found to be superior to that used in your
appraisal, revise your report, including a new URAR, new comparable
photographs, & supporting documents. The new URAR must be clearly
annotated with the word **\"REVISED\"** with the date of the new report
next to the date the original report was signed. You must also provide a
cover letter summarizing why the data is superior & why it was not used
in your original report. If the new information does not alter your
original report, respond in writing to each concern that is addressed in
the appeal.

d\. In all cases, return the original appeal letter & any supporting
documents to VA or the LAPP SAR with your response.

e\. You may charge a fee if you are updating your report or if a review
of the data submitted does not result in a change. You should not charge
any fee if you are correcting your report due to your errors, omissions,
or failure to use the best market data.

f\. \"Meeting\" the Sales Price: Any finding that the fee appraiser\'s
analysis is not based upon recognized appraisal practices & was intended
to \"accommodate\" or \"meet\" the sales price will cause the appraisal
report to be unacceptable. Appropriate disciplinary action will be taken
in accordance with existing procedures in such cases.

30. **Existing Properties**

a\. Generally, a property must have been completed & ready for occupancy
for at least one year to be eligible for a VA loan as an existing
property. It is therefore important to show the correct age on your
report.

b\. The remaining economic life should be carefully considered. If you
estimate less than 40 years, an explanation should be given such as
\"area changing to industrial or commercial,\" \"50 year old property in
poor condition,\" etc. If your estimate is less than 30 years, complete
documentation must be included with the report to support the estimate.
Such conclusions may be based on either known economic factors or on
observed physical condition.

**31. Appraisal of New Construction, Less than One-Year Old**

a\. The request for appraisal should not be submitted until construction
is complete except for customer preference items such as interior
finishes, appliances, equipment, & those improvements for which escrows
are permissible by VA. Interior finishes have been interpreted to mean
carpeting, wallpaper, & specialty light fixtures.

Permissible escrows include the following:

-   Walkways, driveways, & retaining walls

-   Exterior painting

-   Street paving, off-site drainage, including curbs & gutters; &
    public sidewalks

-   Landscaping

-   Finish grading, provided subgrade has been established approximately
    parallel to proposed finished gradients & will divert water away
    from building, prevent standing water, & provide for disposal of
    water from the lot.

b\. If an appraiser goes out to appraise a property & finds that it is
nearing completion, but is not fully complete, the fee appraiser must
notify the lender that the property is not complete. The fee appraiser
may charge the lender a standard inspection fee every time the fee
appraiser must return to the property at the lender's request.

c\. If the property is so incomplete that your timeliness standard will
not be met, you must notify the lender that the case will be canceled by
VA & that the lender must reorder the appraisal when the property is
ready. If the property will be completed within days, call & discuss the
case with the C&V section.

d\. If the fee appraiser is recommending that the appraisal request be
canceled by VA because the property is too far from completion, the fee
appraiser must notify VA in writing.

e\. Appraise the property as an existing dwelling, listing all the items
needed to be completed. The Fee Appraiser will usually be noted on the
CRV or NOV as the Compliance Inspector. Follow the same general
procedure as for repair inspections. Keep in mind that your inspection
should not require quality of workmanship & materials necessary for
Proposed Construction. Your inspection is for the purpose of assuring
that the items considered in your appraisal have been installed.
Existing ten-year insurance backed properties need to meet only the
basic requirements for existing construction. Note any serious
construction defects or flagrant examples of poor workmanship or
materials.

**32. Proposed Construction**

a\. Your appraised value must be as of the date of the appraisal & not
the projected date that construction will be completed.

b\. Appraisals for proposed construction cases must be made from the
plans & specifications. Be sure to use the dimensions shown on the plans
for computing size instead of accepting the square footage sometimes
shown on the plans at face value. The appraiser must inspect the
proposed site to determine the estimated land value, to determine if the
site is acceptable, & to determine if there are any detrimental
influences on or near the site. A photograph of the site must be
provided.

c\. The appraiser must endorse the appraisal report on all proposed
construction with the following certification:

> *\"I hereby certify that the information contained in the exhibits
> identified below has been employed in arriving a the estimate of
> reasonable value noted in this report (identify plans, specifications
> & other exhibits):*
>
> \_\_

Appraiser signature Date"

d\. Your certification for proposed construction is required even if you
believe construction is complete.

e\. A floor plan must be submitted.

f\. A VA Fee Compliance Inspector will be assigned in all proposed cases
to perform the appropriate VA inspections, based on VA approved plans &
specifications.

**33. Master Committee Appraisals**

a\. Master Committee Appraisals are completed on a URAR form in
accordance with VA requirements for proposed construction. This report
will require the following information:

\(1\) An appraisal of each basic plan. Each URAR should include only
those standard features incorporated in the plans & specifications & a
typical lot value.

\(2\) Separate analysis of land sales needed to establish an estimate of
market value for each lot submitted.

\(3\) A determination of supported values derived from the market for
all options that are not included in the basic plan. Sales comparables
must have all known or confirmed option values removed from the
appraised value. The adjustments must be consistent with those values
recommended on VA Form 26-1843b, MCRV Worksheet.

b\. Master Committee Narrative. The narrative should include but not be
limited to:

\(1\) Location of development & neighborhood analysis.

(2) Topography, drainage, & general environment of the site.

> \(3\) Area facilities which include schools, churches, shopping,
> employment, recreation, & transportation.

\(4\) Utilities including private or community water & sewer systems.

\(5\) Zoning & restrictions.

> \(6\) Hazards to the site which include flooding, aircraft noise, &
> other detrimental environmental conditions.

\(7\) Land value analysis & market supporting data.

c\. Planned Unit Development. If the appraisal applies to a PUD with a
mandatory homeowners association, comments must be made concerning the
organizational documents, the common area, the project status,
recreational facilities, & the required fees. It is recommended that
photographs of the site & the improvements be submitted with your
report. VA no longer approves the legal documents for PUD's. We are
mainly concerned with value issues when reviewing the organizational
documents.

d\. Market analysis & conclusions should include a thorough analysis of
current market data, financing conditions, competing developments, &
general market acceptance.

e\. A certification listing those exhibits used in arriving at the value
conclusion.

f\. Narrative Format Master Committee Appraisals (Condominiums). See
Paragraph 12c.

g\. The following certification should be completed for each model:

> *\"I hereby certify that the information contained in the exhibits
> identified below & all condominium or Planned Unit Development
> organizational documents have been employed in arriving at the
> estimate of reasonable value noted in this report (identify plans,
> specifications & other exhibits):*
>
> \_\_

Appraiser signature Date"

**LIQUIDATION APPRAISALS**

We are asking that all liquidation appraisals be treated as priority
assignments and completed within 5 workdays. Do not hold up completion
of assignment because occupant denies you timely access.

-   *Always consider the subject property in its present "as is"
    condition.*

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-   Itemize all repairs (MPR & non-MPR) considered necessary to bring
    the property to marketable condition. Include **both** their cost &
    contributory value. Specify any "emergency" repairs necessary to
    preserve or protect the property from vandalism or extreme weather
    conditions.

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-   Provide occupancy information, including whether the subject is
    abandoned or occupied, the name of the occupant(s), if applicable, &
    whether interior access was obtained. **You should state
    specifically, "interior access gained" or "interior access NOT
    gained".**

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-   **If the property is occupied** **& you do not get inside**, your
    report must be specifically documented with the exact reason(s) for
    not gaining interior access, including names, dates & telephone
    numbers of individuals contacted. Make only three attempts. If you
    are denied access on the first or second attempt, complete
    appraisal. DO NOT HOLD APPRAISAL.

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-   ***If the property is abandoned, do not complete the appraisal until
    you obtain interior access. Notify the requestor & VA.***

-   If it is identified by the requester as a Deed In Lieu or
    **refunding** case, you **must** get inside. Contact our Loan
    Service & Claim Section for assistance. Their number is
    303-914-5651.

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-   Furnish information on at least three competitive listings,
    including **all** of the required information.

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-   Provide the average listing time in the subject's market area,
    (including whether it is expanding, contracting or stable) & the
    average listing price to sales price ratio.

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-   Use the suggested format in the following section for your
    liquidation appraisal addenda.

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-   Timeliness is the same for liquidation appraisals as all other VA
    appraisals (8 days). Document all delays.

-   Forward all liquidation appraisals directly to VA unless the VA Form
    26-1805 is clearly annotated as a Compromise Sale under the Loss
    Mitigation Program (SLMP).

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-   SLMP assignments \-- see paragraph 34h for disbursement
    instructions.

![](media/image7.emf){width="0.5409722222222222in"
height="0.46111111111111114in"} **Remember to tell us by documenting
your report, whether or not you got inside the property! (Please do not
assume we can tell.)**

**LIQUIDATION APPRAISALS**

**34. LIQUIDATION APPRAISAL PROCEDURES**

a\. All liquidation appraisals will be performed considering the subject
property in \"as is\" condition. It is important that it is understood
that by \"as is\" we are saying that the property is considered as it
presently stands with whatever physical inadequacies that exist, if any.
Furthermore, the term \"as is\" does not imply that the property is
necessarily in a poor state of repair. A property that is in a good
state of repair with no physical inadequacies is also considered to be
\"as is\". Fee appraisers are to make appropriate adjustments in the
sales comparison analysis reflecting those repairs & physical
inadequacies (both MPR & non-MPR related) present in the subject
property at the time of the appraisal that would be considered
necessary, & affect value, by the general real estate market & typical
buyer.

b\. Provide an itemized list of all repairs (MPR & non-MPR) considered
necessary & that will affect the marketability of the property. A
checklist is provided to assist you in this matter. However, it is your
responsibility to make sure all requirements are addressed.

The itemized list will indicate the estimated cost to cure & the
contributory value, if any, of the repair. (In estimating the
contributory value, it should be recognized that cost does not always
equal value & that in some cases several individual repair items must be
considered in the aggregate before they are recognized by the general
real estate market as contributing to value.)

-   A list & cost estimate of any emergency repairs required or other
    repairs necessary to preserve or protect the property from vandalism
    or extreme weather conditions.

-   If abandoned, recommendations for draining the heating & plumbing
    systems, shutting off power lines, & locking doors & windows.

-   If occupied, the occupant\'s name, period of occupancy, lease terms
    & expiration date, monthly rental, dates of payment, & to whom
    payable.

-   A minimum of two different photographic views of each major
    structure.

c\. Subject property is observed in an \"as is\" condition. Fee
appraisers must select their comparables from the best available in the
subject\'s market area considering the typical transaction & actions of
the typical buyer & seller. Fee appraisers must not restrict themselves
solely to comparables that are also in \"as is\" condition in the
subject\'s neighborhood or move to other locations for \"as is\"
comparables. Such \"steerage\" is not intended & is not acceptable. Fee
appraisers must use their professional judgment in selecting the best
comparables available that represent the typical transaction in the
subject\'s competing market area.

d\. Fee appraisers shall provide in all liquidation appraisal cases, in
addition to the three closed sales on the appraisal report form,
information on at least three competitive listings or contract offerings
considered the most similar & proximate to the subject property &
certain general market information as specified below. This information
is intended to lend additional support to the value estimate & assist VA
staff in evaluating competing market conditions & trends affecting the
subject property (especially in areas that are experiencing significant
market fluctuation, negative or positive). It is also intended to assist
in ensuring that fee appraisers are rationalizing the closed sales data
with current market conditions. The following information is required &
will be provided on an addendum to the appraisal report. (Example 2 is a
sample of an addendum providing the required information.)

[Competitive Listing or Contract Offering Information.]{.underline}

-   Property address

-   Proximity to subject

-   Design (Style)

-   Total rooms, bedrooms, baths, & approximate gross living area

-   Age (years)

-   Current listing price

-   How long on market (total time listed)

-   Changes in listing price (if known)

-   Contract amount (if known)

-   Short statement as to how this property compares to the subject

[General market Information.]{.underline}

-   Average length of listing time to sale in subject\'s competing
    market area: ***(Indicate if the listing time is expanding or
    decreasing or stable & to what extent.)***

-   Average listing price to sales price ratio. (Appraiser will use
    professional judgment to estimate the ratio if it cannot be
    determined from available data sources.)

e\. Interior Access to Properties

> \(1\) Interior access to the property is critical in the liquidation
> appraisal process in ensuring that a proper appraisal has been
> performed considering all existing conditions of the subject property
> in comparison with the comparable sales used in the sales comparison
> analysis.
>
> (*2) In abandoned property cases, VA expects the
> lender/holder/servicer to make arrangements to assist the fee
> appraiser in gaining interior access to the property. The fee
> appraiser must contact the requester by telephone to advise them that
> the appraisal **cannot be completed** without interior access & that
> the requester\'s assistance in gaining access is required. If you have
> contacted the lender/holder/servicer and 10 business days have gone by
> with no results, please contact our Loan Administration Section at
> 1-(800)-319-9446.*
>
> *In addition, please e-mail or call the Construction & Valuation
> Section immediately and advise us of the status.*
>
> \(3\) In the case of occupied properties, the lender/holder/servicer
> provides assistance by furnishing known contact information about the
> property occupants, including the name & telephone number of the
> current occupant. VA requires the fee appraiser to make diligent
> efforts in gaining interior access to the property. In occupied
> property cases, an exterior-only appraisal may be performed only when:

-   The appraiser has permanently been refused entry by the owner or
    occupants.

-   Access is considered by the appraiser to present a hazard.

-   The appraiser has made three appointments, all of which have been
    broken.

-   Three attempts to visit the property/ call the numbers provided with
    the liquidation appraisal request have resulted in no access. Do not
    delay appraisal beyond the third and final attempt.

> \(4\) The fee appraiser will document the addendum to the appraisal
> report with the exact reason(s) for not gaining access, including the
> names, dates, & telephone numbers of the individuals called in
> attempting to gain access. In these cases, the appraiser will make
> reasonable founded assumptions about the interior conditions of the
> property as they relate to physical inadequacies or needed repairs
> (both MPR & non-MPR) that impact on value. The appraiser will also
> make reasonable efforts to verify the interior conditions of the
> subject property (e.g., though MLS or other listing data sources,
> property assessment records, interviews with neighbors, or others
> familiar with the property, or any other available means).
>
> *Explain delays. The fee appraiser must document the appraisal report,
> or the addendum, with the dates & names & telephone numbers of the
> individuals of the lender/holder/servicer contacted in attempting to
> get assistance in gaining access to the property & a brief description
> of the response(s) received.*
>
> \(6\) If you are unable to gain entrance to an occupied property
> (entrance refused, no one home, etc.), advise us of the circumstances
> on the report, complete the assignment assuming that the interior
> meets the Minimum Property Requirements, mark out the word
> **"inside"** on your certification & send it to us [within the five
> day timeliness standard.]{.underline}

f\. The appraiser must continue to show the date the assignment was
received (either by fax, mail, or e-mail) from the requester in the cost
approach of the URAR. We will continue to monitor & compare dates that
lenders request assignments from our office with dates appraisers show
they received the assignment from the lender.

g\. Lenders who request liquidation appraisals are responsible for
paying fee appraisers promptly. Appraisers are requested to advise us
when a lender continually fails to pay within 90 days from the date of
the appraiser\'s billing.

h\. Servicer Loss Mitigation Program: VA has a program for approved loan
servicing companies to accept pre-foreclosure sale proposals & voluntary
conveyance as an appropriate alternative to foreclosure. These cases
will be identified by the servicer as either a **Compromise Sale** or a
**Deed in Lieu**.

-   **Compromise Sale**: For the purposes of a **Compromise Sale only**,
    the servicer may request that the appraisal be sent **directly to
    their office**.

    The servicer must indicate the appraisal is being ordered in
    connection with a Compromise Sale that is being considered under the
    Servicer Loss Mitigation Program (SLMP). The original of the report
    should be sent to the servicer & one copy sent to VA.

-   **Deed in Lieu**: Servicers will request that appraisers submit
    their appraisal with a cover letter to VA clearly indicating that
    the appraisal is submitted in conjunction with the Servicer Loss
    Mitigation Program. The appraisal is to be submitted **directly to
    VA**.

-   **[VA LIQUIDATION APPRAISAL ADDENDUM]{.underline} LH 000000**

A. PROPERTY ADDRESS: CASE NO.:

Name: Telephone #:

B. PROPERTY STATUS: ( ) Occupied by: Rent Amount \$\_\_\_\_\_\_\_\_\_

Paid To:

Term/Exp Date:

  ----------- ----- ---- -- ------------ -- -------------------- -- ---------------------
  Utilities   Off   On      abandoned       winterization           
                                            recommended             

  Gas                       winterized      listed for sale         name & phone \# of
                                                                    realtor:

  Water                     secured         not listed for sale     

  Electric                  unsecured       location of keys        
  ----------- ----- ---- -- ------------ -- -------------------- -- ---------------------

C. EMERGENCY REPAIRS: The following repairs or actions are necessary in
order to protect & preserve the property from the weather & vandalism:

  -------------------------------------- ----------- ---------------------
  Repair Item                            Estimated   Estimated
                                         cost \$     contributory value

                                                     
  -------------------------------------- ----------- ---------------------

[D. GENERAL REPAIRS: List other necessary repairs (Both MPR & Non-MPR)
that affect marketability.)]{.underline}

  -------------------------------------- ----------- ---------------------
  Repair Item                            Estimated   Estimated
                                         cost \$     contributory value \$

                                                     
  -------------------------------------- ----------- ---------------------

E. COMPETITIVE LISTINGS: A clear, readable copy of an MLS or listing
data source card for each listing is attached. (If not, the equivalent
information is attached.)

ITEM LISTING NO. 1 LISTING NO. 2 LISTING NO. 3

+------------+-------------+---+---------------+---+------------------+---+
| Address    |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Source     |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Current    |             |   |               |   |                  |   |
| List Price |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Time on    |             |   |               |   |                  |   |
| Market &   |             |   |               |   |                  |   |
|            |             |   |               |   |                  |   |
| Previous   |             |   |               |   |                  |   |
| List       |             |   |               |   |                  |   |
| Price(s)   |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Proximity  |             |   |               |   |                  |   |
| to Subject |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Des        |             |   |               |   |                  |   |
| ign/Style, |             |   |               |   |                  |   |
|            |             |   |               |   |                  |   |
| Room Count |             |   |               |   |                  |   |
| & Area     |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Age &      |             |   |               |   |                  |   |
| Condition  |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Market     |             |   |               |   |                  |   |
| Appeal     |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Basement   |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Gara       |             |   |               |   |                  |   |
| ge/Carport |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Heati      |             |   |               |   |                  |   |
| ng/Cooling |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Site       |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+
| Other      |             |   |               |   |                  |   |
| Features   |             |   |               |   |                  |   |
+------------+-------------+---+---------------+---+------------------+---+

Comments on How Listings Compare to the Subject:

F. GENERAL MARKET INFORMATION:

Typical time from listing to sale is \_\_\_\_\_\_\_\_days.

Typical time is stable, expanding or decreasing &
extent:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Typical listing price to sales price ratio is \_\_\_\_\_\_\_%

G. ACCESS INFORMATION (**MUST OBTAIN ACCESS ON ABANDONED PROPERTIES,
DEED IN LIEU, & REFUND REQUESTS):**

Names, phone numbers, dates & times called & results of contact:

Gained access to interior: ( ) YES or ( ) NO **(If no, document
reason(s) for not gaining access.)**

Looked through windows: ( ) YES or ( ) NO.

H. ADDITIONAL COMMENTS:

APPRAISER NAME DATE

**MINIMUM PROPERTY REQUIREMENTS FOR EXISTING CONSTRUCTION**

-   "Safe, Sound, & Sanitary"

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-   The property must comprise a single readily marketable real estate
    entity.

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-   Each living unit must contain:

> A continuing supply of safe & potable water
>
> Sanitary facilities & a safe method of sewage disposal
>
> Heating adequate for healthful & comfortable living conditions
>
> Domestic hot water
>
> Electricity for lighting & for equipment used in the living unit

-   Identify the source of water & sewer to the subject property. If
    served by a private or community system, specify the owner's name &
    number of properties connected. Be as specific as possible.

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-   State if public water or sewer is available to the site.

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-   If the subject property is on private roads, detail the owner, any
    existing easements, & if there are provisions for maintenance.

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-   Structural space (such as attics & crawl spaces) must be adequately
    ventilated to reduce the effect of conditions of excess heat &
    moisture.

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-   There should be adequate access to crawl spaces, which must be clear
    of debris, properly ventilated, & dry.

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-   Roof coverings must provide reasonable future utility. If there are
    more than three layers of shingles, all old shingles must be removed
    prior to re-roofing.

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-   Identify any hazards, such as subsidence, flood, erosion, defective
    lead-based paint, & toxic conditions.

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-   Landscaping must be adequate to provide positive, rapid drainage
    away from the dwelling.

**35. MINIMUM PROPERTY REQUIREMENTS FOR EXISTING CONSTRUCTION**

a\. These requirements for existing housing, together with appropriate
administrative rules & regulations, prescribe the basic qualifications
necessary for eligibility of existing properties.

\(1\) **Real Estate Entity.** The property must comprise a single
readily marketable real estate entity.

\(2\) **Party or Lot Line Wall.**

\(a\) A building constructed on or to a property line must be separated
from the adjoining building by a wall extending the full height of the
building from the foundation to the ridge of the roof. The wall can
separate row type townhouses or semi-detached units.

\(b\) There must be adequate space between buildings to permit
maintenance of the exterior walls.

\(3\) **Services & Facilities.**

\(a\) Trespass. Each living unit must be able to be used & maintained
individually without trespass upon adjoining properties. Any easements
required must run with the land.

\(b\) Utilities. Utilities must be independent for each living unit
except that common service, such as water, sewer, gas, & electricity,
may be provided for living units under a single mortgage or ownership.
Separate utility service shut-offs for each unit shall be provided. For
living units under separate ownership, common utility services may be
provided from the main to the building line when protected by easement
or covenant & maintenance agreement acceptable to VA. Individual
utilities serving a living unit shall not pass over, under, or through
another living unit, unless provision is made for repair & maintenance
of utilities without trespass on adjoining properties or legal provision
is made for permanent right of access for maintenance & repair of
utilities.

\(c\) Other Facilities. Other facilities must be independent for each
living unit, except that common service, such as laundry & storage space
or heating, may be provided for in two-to-four living unit buildings
under a single mortgage.

\(4\) **Required Provisions.**

\(a\) Each living unit must contain the following:

-   A continuing supply of safe & potable water.

-   Sanitary facilities & a safe method of sewage disposal.

-   Heating adequate for healthful & comfortable living conditions.
    Regional offices may determine that climatic conditions are such
    that mechanical heating is not required.

-   If the property has an unvented space heater or fireplace that uses
    liquid or gaseous fuel, the fee appraiser is to report this in the
    comments section of "conditions of the improvements...".

-   Homes with a wood burning stove as a primary heat source must also
    have a permanently installed conventional heating system that
    maintains a temperature of at least 50 degrees Fahrenheit in areas
    containing plumbing systems.

-   Solar systems for domestic water heating &/or space heating must
    meet standards in [HUD Handbook 4930.2,]{.underline} Solar Heating &
    Domestic Hot Water Heating Systems, & be backed-up 100 percent with
    a conventional thermal energy subsystem or other backup system that
    will provide the same degree of reliability & performance as a
    conventional system.

-   Domestic hot water.

-   Electricity for lighting & for equipment used in the living unit.

\(b\) When individual water supply & sewage disposal systems apply, the
following shall be required:

-   Water quality must meet the requirements of the health authority
    having jurisdiction. If the local authority does not have specific
    requirements, the maximum contaminant levels established by the EPA
    (Environmental Protection Agency) shall apply.

-   If the authority is unable to perform the water quality analysis
    timely, a private, commercial testing laboratory or a licensed
    sanitary engineer acceptable to the authority may take & test water
    samples.

-   Each living unit must be provided with a sewage disposal system
    adequate to dispose of all domestic wastes in a manner that will not
    create a nuisance, or in any way endanger the public health.

-   Individual pit privies are permitted where such facilities are
    customary & are the only feasible means of waste disposal, provided
    they are installed in accordance with the recommendations of the
    local Department of Health or, in the absence of such
    recommendations, with the requirements of the U.S. Public Health
    Service publication \"Individual Sewage-Disposal Systems.\"

-   Connection must be made to a public or community water/sewage
    disposal system whenever feasible.

\(5\) **Nonresidential Use - Design Limitations.**

\(a\) Any nonresidential use of the property shall be subordinate to its
residential use & character. A property, any portion of which is
designed or used for nonresidential purposes, is eligible only if the
type or extent of the nonresidential use does not impair the residential
character of the property.

\(b\) Areas designed or used for nonresidential purposes shall **not
exceed** **25 percent** of the total floor area. Storage areas or
similar spaces that are integral parts of the nonresidential portion
shall be included in the total nonresidential area.

\(6\) **Access - Streets**.

\(a\) Each property must be provided with a safe & adequate pedestrian
or vehicular access from a public or private street.

\(b\) All streets must have an all-weather surface.

\(c\) Private streets must be protected by permanent easements &
maintained by a homeowners association or joint maintenance agreement.

\(7\) **Access to the living unit** must be provided without passing
through any other living unit.

\(8\) **Access to the rear yard** must be provided 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.

\(9\) **Defective Conditions.** Defective construction, poor
workmanship, evidence of continuing settlement, excessive dampness,
leakage, decay, termites, or other conditions impairing the safety,
sanitation, or structural soundness of the dwelling shall render the
property unacceptable until the defects or conditions have been remedied
& the probability of further damage eliminated.

\(10\) **Space Requirements.** Each living unit must be provided with
space necessary to assure suitable living, sleeping, cooking & dining
accommodations, & sanitary facilities.

\(11\) **Mechanical Systems.** Mechanical systems must be safe to
operate, be protected from destructive elements, have reasonable future
utility, durability & economy, & have adequate capacity & quality.

\(12\) **Ventilation.** Natural ventilation of structural space, such as
attics & crawl spaces, must be provided to reduce the effect of
conditions of excess heat & moisture that are conducive to decay &
deterioration of the structure.

\(13\) **Roof Covering.** Roof covering must prevent entrance of
moisture & provide reasonable future utility, durability, & economy of
maintenance. When roofing is needed for a defective roof already
consisting of three layers of shingles, all old shingles must be removed
prior to reroofing.

\(14\) **Hazards.** The property must be free of hazards that may
adversely affect the health & safety of the occupants or the structural
soundness of the improvements, or which may impair the customary use &
enjoyment of the property by the occupants. The hazards can be
subsidence, flood, erosion, defective lead base paint, or the like.

\(15\) **Crawl Space.** In order to insure against conditions that could
cause deterioration to the building & seriously affect the marketability
of the property, it is required that:

\(a\) There must be adequate access to the crawl space.

\(b\) The floor joists must be sufficiently above the highest level of
the ground to provide access for maintenance & repair of ductwork &
plumbing.

\(c\) The crawl space must be clear of all debris & properly vented.

\(d\) Any excessive dampness or ponding of water in the crawl space must
be corrected.

\(16\) **Drainage.** The site must be graded so as to provide positive,
rapid drainage away from the perimeter walls of the dwelling & prevent
ponding of water on the site.

**THE LENDER APPRAISAL PROCESSING PROGRAM**

**(LAPP)**

-   Timeliness standards are the same as those for all other VA
    appraisals.

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-   Forward the completed appraisal report directly to the LAPP lender
    shown on the VA Form 26-1805.

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```
-   Disclose value & repairs only to the lender's staff appraisal
    reviewer (SAR). Any questions concerning these items by other
    parties should be referred to the SAR.

-   Fee appraisers are expected to be cooperative with LAPP SAR's in
    addressing concerns with the content of their reports.

-   All changes, clarifications, corrections, or revisions by the fee
    appraiser to the appraisal report must be made in writing, signed, &
    dated.

-   Revised appraisals must be **clearly marked in bold letters with the
    word "REVISED" by the fee appraiser**.

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-   Respond to all requests for reconsideration as follows:

+------------+------------+----------+--------------------------------+
| Recon      | Increase   | No       | Respond to:                    |
| Request    |            | increase |                                |
|            |            |          |                                |
| from:      |            |          |                                |
+------------+------------+----------+--------------------------------+
| VA         | Page 2 of  | n        | VA                             |
|            | URAR       | arrative |                                |
+------------+------------+----------+--------------------------------+
| LAPP       | Page 2 of  | n        | If no value increase or        |
| Lender     | URAR       | arrative | increase is less than 2% -     |
|            |            |          | send to SAR;                   |
|            |            |          |                                |
|            |            |          | If value increase is more than |
|            |            |          | 2% send to VA;                 |
+------------+------------+----------+--------------------------------+

-   The following requests **cannot** be processed as LAPP cases & must
    be sent directly to VA:

> Security for a Defaulted Loan to be Foreclosed
>
> Master Certificate of Reasonable Value (MCRV)

+--------------------+--------------+-----------------+---------------+
| **Subject**        | **Page**     | **Subject**     | **Page**      |
+--------------------+--------------+-----------------+---------------+
| **Abandoned        | **2          | **Legal         | **15,18,26**  |
| Properties**       | 6,41-43,45** | Descriptions**  |               |
+--------------------+--------------+-----------------+---------------+
| **Acreage**        | **17**       | **Liquidation   | **5-7,        |
|                    |              | Appraisals**    | 10,1          |
|                    |              |                 | 1,15,19,24,** |
|                    |              | **(See          |               |
|                    |              | Foreclosure)**  | **25,         |
|                    |              |                 | 36,41,42-45** |
+--------------------+--------------+-----------------+---------------+
| **Airport Zones**  | **16**       | **List/Sales    | **26,43**     |
|                    |              | Price Ratio**   |               |
+--------------------+--------------+-----------------+---------------+
| **Appeals**        | **11, 37 &   | **Location      | **4,26,27**   |
|                    | 50**         | Maps**          |               |
+--------------------+--------------+-----------------+---------------+
| **Appeals -        | **11**       | **Loss          | *             |
| Timeliness**       |              | Mitigation      | *5,10,41,44** |
|                    |              | Program         |               |
|                    |              | (SLMP)**        |               |
+--------------------+--------------+-----------------+---------------+
| **Assignments -    | **9**        |                 |               |
| status**           |              |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Associate        | **13**       | **Manufactured  | **15,22,23**  |
| appraiser**        |              | Homes**         |               |
+--------------------+--------------+-----------------+---------------+
|                    |              | **Marketing     | **26,28**     |
|                    |              | Time (Expanding |               |
|                    |              | or              |               |
|                    |              | Contracting**   |               |
+--------------------+--------------+-----------------+---------------+
| **Building Codes** | **19**       | **MPR's**       | **8,11,1      |
|                    |              |                 | 5,18,19,22,41 |
|                    |              |                 | 42,46**       |
+--------------------+--------------+-----------------+---------------+
|                    |              | **Modular       | **22**        |
|                    |              | Homes**         |               |
+--------------------+--------------+-----------------+---------------+
| **Comm             | **17**       |                 |               |
| ercial/Residential |              |                 |               |
| Combination**      |              |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Common Party     | **18**       | *               | **48**        |
| Walls**            |              | *Nonresidential |               |
|                    |              | Use**           |               |
+--------------------+--------------+-----------------+---------------+
| **Compromise       | **5, 6, 44** |                 |               |
| Sales**            |              |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Concessions,     | **26, 28,    | **Occupied      | **41-44**     |
| Sales &            | 32**         | Properties -    |               |
| Financing**        |              | Liquidation     |               |
|                    |              | Appraisals**    |               |
+--------------------+--------------+-----------------+---------------+
| **Condo ID         | **15, 17**   | **Off Site      | **21**        |
| Number**           |              | Improvements**  |               |
+--------------------+--------------+-----------------+---------------+
| **Condominiums**   | **7,8,15,1   |                 |               |
|                    | 7,24,26,31** |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Conduct and      | **7,8,14**   | **Partial       | **17**        |
| Ethical            |              | Release**       |               |
| Practices**        |              |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Conflict of      | **7,12**     | **Payment of    | **7,12,14**   |
| Interest**         |              | Fees**          |               |
+--------------------+--------------+-----------------+---------------+
| **Cost Approach**  | **23,3       | **Permanent     | **15,22**     |
|                    | 0,31,32,35** | Foundation -    |               |
|                    |              | Manufactured    |               |
|                    |              | homes**         |               |
+--------------------+--------------+-----------------+---------------+
|                    |              | **Proposed      | **7,26,39**   |
|                    |              | Construction**  |               |
+--------------------+--------------+-----------------+---------------+
|                    |              | **PUD's**       | **17,29,40**  |
+--------------------+--------------+-----------------+---------------+
| **Date Received**  | **11,24,2    |                 |               |
|                    | 6,32,37,44** |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Deed in Lieu**   | **6,41,44**  | *               | **13,         |
|                    |              | *Reconciliation | 24,32,35,36** |
|                    |              | Section**       |               |
+--------------------+--------------+-----------------+---------------+
| **Defective        | **49**       | **              | **            |
| Conditions**       |              | Reconsideration | 17,32,37,50** |
|                    |              | of Value**      |               |
+--------------------+--------------+-----------------+---------------+
| **Departure        | **24,25**    | **Refunding     | **41**        |
| Provision**        |              | Appraisals**    |               |
+--------------------+--------------+-----------------+---------------+
| **Divulging        | **14**       | **Remaining     | **8,          |
| Information**      |              | Economic Life** | 23,24,30-32** |
+--------------------+--------------+-----------------+---------------+
| **Drainage**       | **21,29**    | **Repair        | **14,15,39**  |
|                    |              | C               |               |
|                    |              | ertifications** |               |
+--------------------+--------------+-----------------+---------------+
|                    |              | **Residenti     | **17**        |
|                    |              | al/Commercial** |               |
+--------------------+--------------+-----------------+---------------+
| **Easements**      | **16**       |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Economic Life**  | **8,23,2     | **Settlement**  | **20,31,49**  |
|                    | 4,30,31,32** |                 |               |
|                    |              |                 |               |
|                    | **38**       |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Electric         | **16**       | **Sewer         | **            |
| Transmission       |              | Systems**       | 18,40,46,47** |
| Lines**            |              |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Encroachments**  | **16**       | **Streets**     | **            |
|                    |              |                 | 16,21,40,48** |
+--------------------+--------------+-----------------+---------------+
| **Examples**       | **45**       | **Structural    | **11,15,      |
|                    |              | Deficiencies**  | 19,36,46,49** |
| **Liquidation      | **last       |                 |               |
| addendum**         | page**       |                 |               |
|                    |              |                 |               |
| **Sample           |              |                 |               |
| Appraisal**        |              |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Existing         | **46**       |                 |               |
| Construction**     |              |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Existing         | **1          | **Termites**    | **49**        |
| Construction less  | 8,30,36,38** |                 |               |
| than one year      |              |                 |               |
| old**              |              |                 |               |
+--------------------+--------------+-----------------+---------------+
| **External         | **16**       | TIMELINESS      | **5,7,8       |
| Influences**       |              |                 | ,11,17,24,32, |
|                    |              |                 | 38,41,44,50** |
+--------------------+--------------+-----------------+---------------+
|                    |              | **Trending      | **28**        |
|                    |              | Statement**     |               |
+--------------------+--------------+-----------------+---------------+
| **Fees & Billing** | **7,12**     |                 |               |
+--------------------+--------------+-----------------+---------------+
| **Flood maps**     | **16**       | **URAR**        | **11,         |
|                    |              |                 | 21,24,25,26** |
+--------------------+--------------+-----------------+---------------+
| **Foreclosure      | **see        | **Utilities**   | **            |
| Appraisals**       | l            |                 | 18,21,40,47** |
|                    | iquidation** |                 |               |
+--------------------+--------------+-----------------+---------------+
|                    |              |                 |               |
+--------------------+--------------+-----------------+---------------+
| **General          | **9**        | **Vacant        | **See         |
| Information**      |              | Properties**    | Abandoned**   |
+--------------------+--------------+-----------------+---------------+
| **Gross Rent       | **18**       |                 |               |
| Multiplier**       |              |                 |               |
+--------------------+--------------+-----------------+---------------+
|                    |              | **Water         | **            |
|                    |              | Systems**       | 18,46,47,48** |
+--------------------+--------------+-----------------+---------------+
| **Homeowners       | **25,3       |                 |               |
| Assoc.**           | 0,33,40,48** |                 |               |
+--------------------+--------------+-----------------+---------------+
|                    |              | **Zero Lot      | **18**        |
|                    |              | Line**          |               |
+--------------------+--------------+-----------------+---------------+
| **LAPP - Lender    | **20,32,50** |                 |               |
| Appraisal          |              |                 |               |
| Process**          |              |                 |               |
+--------------------+--------------+-----------------+---------------+