U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

H O U S I N G

4465.1 CHG

TRANSMITTAL NO.10

February 15, 1979

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1\. This Transmits:

Changes to Handbook 4465.1, Valuation Analysis for Project

Mortgage Insurance, dated 2/79.

2\. Explanation of Changes:

Changes to paragraph 1-8e(1)(c) redesignates churches to

religious centers.

Changes to paragraphs 2-1a and 8-2a(1) revise appraisal

instructions to satisfy equal opportunity considerations.

3\. Filing Instructions:

Remove: Insert:

Handbook 4465.1 CHG Handbook 4465.1 CHG

Pages 1-9 and 1-10, dated 9/72 Page 1-9, dated 9/72

Pages 2-1 and 2-2, dated 1/74 Page 1-10, dated 2/79

Pages 8-1 and 8-2, dated 9/72 Pages 2-1 and 2-1.1, dated 2/79

Page 2-2, dated 1/74

Page 8-1, dated 9/72

Page 8-2, dated 2/79

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

Assistant Secretary for Housing

\- Federal Housing Commissioner

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

W-1, W-2, W-3, W-3-1, W-4, R-1, R-2, R-3, R-3-1 (H),

R-3-2, R-4, R-4-1, R-4-2, R-5, R-5-1, R-5-2

W-1 Assistant Secretaries, Deputy Assistant Secretaries,

General Counsel, staff offices reporting to the Secretary

W-2 HQ Office Directors, Special Assistants,

those reporting directly to Assistant Secretaries

W-3 HQ Division Directors, those reporting directly to Office

Directors, multiple copies for staff

W-3-1 Directives Management Officers\--Headquarters and Regions,

library, ACIR (Advisory Commission on Intergovermental

Relations)

W-4 Branch Chiefs, multiple copies for staff

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

R-3 Bulk shipment to Regional Offices

R-3-1 Bulk shipment to Regional Offices for selective

distribution by program area

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

H O U S I N G

4465.1 CHG

TRANSMITTAL NO.9

August 17, 1978

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1\. This Transmits:

Revision to Handbook 4465.1, Valuation Analysis for Project Mortgage

Insurance, dated 8/78.

2\. Explanation of Changes:

Paragraph 6-3 is changed to modify valuation instructions relating

to the trending of operating and tax expense estimates. The new

instruction will result in both the income and expense estimates

being trended to the same date, which is the date of initial

occupancy. Previously, the procedure was to reflect data for

income to the date of initial occupancy and data for expenses to

one year from initial occupancy.

3\. Filing Instructions:

Remove: Insert:

Handbook 4465.1 CHG Handbook 4465.1 CHG

Page 6-1 and 6-2 Page 6-1 dated 4/74

dated 4/74 Pages 6-2 and 6-2.1, dated 8/78

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

Assistant Secretary for Housing

\- Federal Housing Commissioner

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

W-1, W-2, W-3, W-3-1, W-4, R-1, R-2, R-3, R-3-1(HM & HPMC)

R-3-2, R-4, R-4-1, R-4-2, R4FB, R-5, R-5-1, R-5-2

W-1 Assistant Secretaries, Deputy Assistant Secretaries,

General Counsel, staff offices reporting to the Secretary

W-2 HQ Office Directors, Special Assistants,

those reporting directly to Assistant Secretaries

W-3 HQ Division Directors, those reporting directly to Office

Directors, multiple copies for staff

W-3-1 Directives Management Officers\--Headquarters and Regions,

library, ACIR (Advisory Commission on Intergovermental

Relations)

W-4 Branch Chiefs, multiple copies for staff

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

R-3 Bulk shipment to Regional Offices

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

H O U S I N G

4465.1 CHG

TRANSMITTAL NO.8

May 5, 1978

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1\. This Transmits:

Revision to Handbook 4465.1, Valuation Analysis for Project Mortgage

Insurance, dated 5/78.

2\. Explanation of Changes:

Paragraph 3-15 permits the use of the maximum HUD multifamily

insured mortgage interest rate rather than the direct loan interest

rate in testing the acceptability of ground lease payments for

Section 202 projects. Paragraph 4-7 refers processors of air

rights leaseholds to current instructions on leaseholds in Chapter

3, Handbook 4465.1.

3\. Filing Instructions:

Remove: Insert:

Handbook 4465.1 CHG Handbook 4465.1 CHG

Table of Contents, Table of Contents,

Page i, dated 12/76 Page i, dated 5/78

Page ii, dated 8/76 Page ii, dated 8/76

Page 3-12A, dated 12/76 Page 3-12.1, dated 5/78

Page 4-5 (and 6), Page 4-5 (and 6)

dated 9/72 dated 5/78

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

Assistant Secretary for Housing

\- Federal Housing Commissioner

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

W-1, W-2, W-3, W-3-1, W-4, R-1, R-2, R-3, R-3-1(HM & HPMC)

R-3-2, R-4, R-4-1, R-4-2, R4FB, R-5, R-5-1, R-5-2

W-1 Assistant Secretaries, Deputy Assistant Secretaries,

General Counsel, staff offices reporting to the Secretary

W-2 HQ Office Directors, Special Assistants,

those reporting directly to Assistant Secretaries

W-3 HQ Division Directors, those reporting directly to Office

Directors, multiple copies for staff

W-3-1 Directives Management Officers\--Headquarters and Regions,

library, ACIR (Advisory Commission on Intergovermental

Relations)

W-4 Branch Chiefs, multiple copies for staff

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

R-3 Bulk shipment to Regional Offices

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

H O U S I N G

4465.1 CHG

TRANSMITTAL NO.7

March 2, 1977

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1\. This Transmits:

Revision to Handbook 4465.1, Valuation Analysis for Project

Mortgage Insurance, dated 3/77.

2\. Explanation of Materials Transmitted:

Paragraph 1-2 has been revised to incorporate HPMC-FHA Notices

76-8 and 76-19 into the basic valuation instructions.

3\. Filing Instructions:

Remove Insert:

Handbook 4465.1 Handbook 4465.1 CHG

Pages 1-1 and 1-2 Page 1-1 dated 9/72

dated 9/72 Pages 1-2 and 1-2A

dated 3/77

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

Acting Deputy Assistant Secretary for Housing

\- Federal Housing Commissioner

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

W-1, W-2, W-3, W-3-1, W-4, R-1, R-2,

R-3, R-3-1 (HPMC & HM), R-3-2, R-4,

R-4-1, R-4-2, R4FB, R-5, R-5-1, R-5-2

W-1 Assistant Secretaries, Deputy Assistant Secretaries,

General Counsel, staff offices reporting to the Secretary

W-2 HQ Office Directors, Special Assistants,

those reporting directly to Assistant Secretaries

W-3 HQ Division Directors, those reporting directly to Office

Directors, multiple copies for staff

W-3-1 Directives Management Officers\--Headquarters and Regions,

library, ACIR (Advisory Commission on Intergovermental

Relations)

W-4 Branch Chiefs, multiple copies for staff

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

R-3 Bulk shipment to Regional Offices

R-3-1 Bulk shipment to Regional Offices for selective

distribution by program area

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

H O U S I N G

4465.1 CHG

TRANSMITTAL NO.6

December 20, 1976

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1\. This Transmits:

Revision to Handbook 4465.1, Valuation Analysis for Project Mortgage

Insurance, dated 12/76.

2\. Paragraph 3-14 has been added to provide instructions to the field

to help prevent the rejection of leasehold estate projects because

of tandem plan financing.

3\. Filing Instructions:

Remove: Insert:

Table of Contents (i and ii) Table of Contents (i)

dated 8/76 dated 12/76

Table of Contents (ii)

dated 8/76

Page 3-12A dated 12/76

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

Assistant Secretary for Housing

\- Federal Housing Commissioner

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

W-1, W-2, W-3, W-3-1, W-4, R-1, R-2, R-3,

R-3-1 (HPMC & HM), R-3-2, R-4, R-4-1, R-4-2,

R-5, R-5-1, R-5-2, R4FB

W-1 Assistant Secretaries, Deputy Assistant Secretaries,

General Counsel, staff offices reporting to the Secretary

W-2 HQ Office Directors, Special Assistants,

those reporting directly to Assistant Secretaries

W-3 HQ Division Directors, those reporting directly to Office

Directors, multiple copies for staff

W-3-1 Directives Management Officers\--Headquarters and Regions,

library, ACIR (Advisory Commission on Intergovermental

Relations)

W-4 Branch Chiefs, multiple copies for staff

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

R-3 Bulk shipment to Regional Offices

R-3-1 Bulk shipment to Regional Offices for selective

distribution by program area

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

H O U S I N G

4465.1 CHG 5

TRANSMITTAL No. 5

8/31/76

NOTICE

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1\. This Transmittal Transmits:

Revised Chapter 3, Ground Leases, Handbook 4465.1, Valuation

Analysis Handbook for Project Mortgage Insurance, dated 8/76.

2\. Explanation of Material Transmitted:

Chapter 3 has been rewritten to provide instructions for valuation

processing of projects on leaseholds with variable ground rentals,

in accord with the Regulations. It is believed that sliding scale

ground rentals are more realistic in terms of contemporary

economics.

3\. Applicability:

These instructions shall be applicable upon receipt to any project

on a leasehold which has not yet received a conditional or firm

commitment. Outstanding commitments will be honored. These

instructions shall not be applied to reduce the amount of an

outstanding commitment.

4\. Filing Instructions:

Remove: Insert:

Handbook 4465.1 Handbook 4465.1

Foreword, dated 9/72 Foreword, dated 8/76

Table of Contents (i and ii), Table of Contents (i and ii),

dated 9/72 dated 8/76

Pages 3-1 thru 3-4, Pages 3-1 thru 3-14,

dated 9/72 dated 8/76

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

Assistant Secretary for Housing

\- Federal Housing Commissioner

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

Tab 4, R-1, R-2, R-3, R-3-2, R-4, R-4-1, R4FB,

R-5, R-5-1, W-3-1

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

R-3 Bulk shipment to Regional Offices

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

W-3-1 Directives Management Officers\--Headquarters and Regions,

library, ACIR (Advisory Commission on Intergovermental

Relations)

U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

HOUSING PRODUCTION AND MORTGAGE CREDIT

4465.1 CHG 4

TRANSMITTAL

April 25, 1974

NOTICE

NO. 4

The Three Previous Changes Were

dated August 8, and November 11, 1973,

and January 9, 1974

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1\. This Notice Transmits:

Page Changes to HUD Handbook 4465.1, Valuation Analysis for Project

Mortgage Insurance.

2\. Explanation of Material Transmitted:

This revision is to eliminate the individual expense estimates on

the FHA Form 2264, as they are now included on the FHA Form 2274.

3\. Filing Instructions:

Remove: Insert:

Pages 6-1 and 6-2 Pages 6-1 and 6-2

dated 8/73 dated 4/74

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

Tab 4, R-1, R-2, R-3, R-3-2,

R-4, R-4-1, R-5, R-5-1, R4FB,

W-3-1

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

R-3 Bulk shipment to Regional Offices

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

W-3-1 Directives Management Officers\--Headquarters and Regions,

library, ACIR (Advisory Commission on Intergovermental

Relations)

U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

4465.1 CHG 3

CIRCULAR

January 9, 1974

SUBJECT: Valuation Analysis for Project Mortgage Insurance Handbook

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1\. This Circular Transmits:

Revised pages to HUD Handbook 4465.1, Valuation Analysis for

Project Mortgage insurance.

2\. Explanation of Material Transmitted:

In processing proposals where unusual land improvements exist, the

appraiser shall subtract from the Value of the Site Fully Improved

the sum of the dollar amounts of the Unusual Land Improvements

(Line 36a of Form 2264), the prorated amount applicable to the Unusual

Land Improvements included in General Requirements, Builder\'s General

Overhead, Builder\'s Profit (if applicable), Architect\'s Fee - Design,

Architect\'s Fee - Supervision, Bond Premium (Lines 42 through

47 of Section G, Form 2264), and, if applicable, the 10% BSPRA based

on the sum of all of the above mentioned items. Reducing the Value

of Land Fully Improved by not only the amount of the Unusual Land

Improvements but also the properly prorated amounts of the applicable

fees will provide for a more realistic replacement cost by precluding

duplication of these fees in the Warranted Price of Land.

3\. Filing instructions:

Remove: Insert:

Pages 2-1 thru 2-4 Pages 2-1 thru 2-3, dated 1/74

dated 9/72 Page 2-4, dated 9/72

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

Tab 4, R-1, R-2, R-3, R-3-2,

R-4, R-4-1, R-5, R-5-1, R4FB,

W-3-1

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

R-3 Bulk shipment to Regional Offices

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

W-3-1 Directives Management Officers\--Headquarters and Regions,

library, ACIR (Advisory Commission on Intergovermental

Relations)

U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

4465.1 CHG 2

CIRCULAR

November 1, 1973

SUBJECT: The Valuation Analysis for Project Mortgage

Insurance Handbook

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1\. This Circular Transmits:

Page Changes to HUD Handbook 4465.1, Valuation Analysis for Project

Mortgage Insurance.

2\. Explanation of Material Transmitted:

a\. The revision to paragraph 6-5.d.(2) requires the inclusion of

two conventional land sales in the land appraisal process.

b\. To restore a provision for the possible use of unused contingency

reserve to cover acquisition costs in excess of the HUD-FHA

finding of \"as is\" value by the residual approach. This provision

was inadvertently omitted from paragraph 10-5.c. in the previous

issuance.

c\. Paragraphs 10-7. and 10-8. have been amended to clarify the

interest and inspection fee calculations.

3\. Filing Instructions:

Remove: Insert:

Pages 6-3 and 6-4, dated 8/73 Page 6-3, dated 8/73

Pages 10-3 thru 10-5, dated 9/72 Page 6-4, dated 11/73

Page 10-3, dated 9/72

Pages 10-4 and 10-5, dated 11/73

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HUD-21A(12-70) Previous edition may be used

Tab 4, R-1, R-2, R-3,R-3-2, R-4

R-4-1, R-5, R-5-1, R4FB, W-3-1

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

W-3-1 Directives Management Officers\--Headquarters and Regions,

library, ACIR (Advisory Commission on Intergovermental

Relations)

U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

4465.1 CHG 1

TRANSMITTAL

August 8, 1973

NOTICE

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1\. This Notice Transmits the following:

Revised Chapter 6, Paragraph 6-3, Handbook 4465.1, Valuation Analysis

for Project Mortgage Insurance, dated September 1972.

2\. Purpose:

Provides instructions to clarify the trend adjustment for operating

expenses, and to extend the time from initial occupancy, through the

first year of operation.

3\. Filing Instructions:

Remove Pages 6-1 through 6-4 dated 9/72.

Insert Pages 6-1 through 6-4 dated 8/73.

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

R-3 Bulk shipment to Regional Offices

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

U S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

TRANSMITTAL

NOTICE September 22, 1972

1\. This Notice Transmits the Following:

The Validation Analysis Handbook for Project Mortgage Insurance

on five or more rental units relating to HUD policies and

procedures for multifamily mortgage insurance, Section 207.

2\. Explanation of Materials Transmitted:

This Handbook provides HUD staff with basic instructions and

procedures related to Valuation Analysis of multifamily project

for project mortgage insurance purposes on five or more rental

units. It incorporates instructions contained in portions of

the FHA Underwriting Manual, as well as other miscellaneous

Valuation instructions.

3\. Applicability:

The basic contents of this Handbook are those Valuation policies

and procedures that were in effect as of December 31, 1971.

All Valuation issuance released subsequent to December 31, 1971,

take precedence over the contents of this Handbook wherever

applicable.

4\. Cancellations:

The following issuances are cancelled:

FHA Manual - Volume VII, Book II, Section 29,

Paragraphs 72900 thru 72924.5 and

Paragraphs 72926 thru 72926.23

Circular - FHA 4205.9 - Inclusion of FNMA Fees in Unassisted

Multifamily Housing Mortgages

dated January 15, 1970

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O-1,W-3-1,R-1,R-2,R-3,R-3-2,

R-4,R4FB,R-4-1,R-5,R-5-1

4465.1 CHG

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FOREWORD

This Handbook contains the instructions, standards and procedures

\* prescribed by the Assistant Secretary for Housing - Federal Housing

Commissioner governing Valuation Analysis of applications for the

insurance of mortgage loans on multifamily properties.

References:

\(1\) 4460.1 - Architectural Analysis and Inspection for Project

Mortgage Insurance, Section 207

\(2\) 4480.1 - Multifamily Reports and Forms Catalog

\(3\) 1390.1 - Departmental Policies, Responsibilities and

Procedures for Protection and Enhancement of

Environmental Quality

\(4\) 1390.2 - Noise Abatement and Control: Departmental Policy,

Implementation, Responsibilities and Standards

\(5\) 4010.1 - Definitions, Policy Statements, and General

Rulings

\(6\) 4150.1 - Valuation Analysis Handbook for Home Mortgage

Insurance (Chapter 7)

\(7\) 4445.1 - Underwriting Technical Direction for

Project Mortgage Insurance \*

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8/76