www.hudclips.org 

U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

January 11, 1994
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 94-3
     TO:  ALL APPROVED MORTGAGEES
     SUBJECT:  Revised Appraisal Report Forms
 
          Since December of 1992, HUD has been participating in a
     joint effort with Fannie Mae, Freddie Mac, VA and a working group
     from the appraisal industry to revise the Uniform Residential
     Appraisal Report and the Statement of Limiting Conditions and
     Appraiser's Certification.  The revised forms are now finalized
     and must be used for appraisals of single-family properties made
     on or after February 1, 1994.  At the discretion of the lender or
     appraiser, the revised forms may be used immediately.
 
          The Statement of Limiting Conditions and Appraiser's
     Certification (Fannie Mae Form 1004B and Freddie Mac Form 439)
     have been adopted for HUD purposes.
 
Sincerely yours,
 

Nicolas P. Retsinas
Assistant Secretary for Housing
- Federal Housing Commissioner
 
     Attachments
 
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HUD INSTRUCTIONS FOR COMPLETING THE UNIFORM RESIDENTIAL APPRAISAL
REPORT (URAR).  All appraisal reports must be prepared with ball
point pen, typed or computer generated.
 
                              SUBJECT
 
1.     File Number.  Insert the FHA Case Number at top right
       after "File No.".
 
2.     Subject.  The property address and complete legal
       description must be provided.  If it is a Leasehold,
       follow instructions in Chapter 6 of HUD Handbook 4150.1 
       REV-1; if it is a PUD, follow instructions in Chapter 11
       of HUD Handbook 4150.1 REV-1.
 
                            NEIGHBORHOOD
 
1.     Complete the requested information indicating the type of
       location.  When boxes "urban" and "declining" are both
       checked, the appraiser should consider making a
       recommendation that the mortgage be insured pursuant to
       Section 223(e) and provide pictures of the street.  The
       appraiser should also indicate a reasonable marketing time
       for the subject property.
 
2.     Predominant Occupancy.  Mark appropriate boxes.
 
3.     Single Family Housing.  Show low and high neighborhood
       prices and ages, and what would be considered the
       predominant value and age.
 
4.     Present land use.  Show percentage of various types of
       neighborhood buildings.
 
5.     Land use change.  Be sure to observe any obvious change(s)
       in land use and note what the change is.
 
6.     Neighborhood boundaries.  Name streets on north, south,
       east and west edges of the neighborhood and
       characteristics typical of the neighborhood.
 
7.     Factors that affect marketability.  Describe the favorable
       or unfavorable factors that affect the marketability of
       properties in the neighborhood.  Describe those features
       which would attract residents to the neighborhood or cause
       them to reject the neighborhood.
 
8.     Market Conditions in subject neighborhood.  Self-explanatory.
 
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                         PLANNED UNIT DEVELOPMENT
 
1.     Planned Unit Development (PUD).  If the unit is in a PUD,
       provide all relevant project information and describe the
       common elements and recreational facilities.
 
                                   SITE
 
1.     Dimensions.  List all dimensions of the site.  If
       irregular, the appraiser should show boundary dimensions,
       such as:  85' X 150' x 195' X 250'.
 
2.     Site Area.  Enter area in square feet or acres.
 
3.     Corner Lot.  Enter "Yes" or "No."
 
4.     Zoning Classification.  Enter the zoning type used by the
       local municipality to describe the type of use permitted.
       For example:  "residential - single family," "residential
       - 1 - 4 family".  Do not use abbreviations such as "R-1" or
       "A-1" by themselves.  The abbreviated descriptions can
       vary among communities.
 
5.     Zoning Compliance.  State whether it is legal, legal
       nonconforming, illegal or no zoning.  Use "Historic," if
       applicable.
 
       If a nonconforming use exists, enter "nonconforming" and
       state whether it is a legal use which has been approved by
       the local zoning authority.  Determine if current use is
       in compliance with the zoning ordinances; if not, the
       property should be rejected.
 
6.     Highest and Best Use.  This entry represents the highest
       and best use of the site in relation to the neighborhood.
       If present use represents the highest and best use, check
       "present use."  If it does not, check "other use" and
       explain.
 
7.     Other Use.  If the present use is not the highest and best
       use of the site, enter the use that should exist and
       explain in the "Comments" section.
 
8.     Utilities.  Either check a box or explain under "Other."
       Public utilities are provided by a unit of government.
       "Other" can reflect individual and/or community systems.
       If electricity is underground, so state.
 
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9.     Off-site improvements.  Describe by entering a brief
       description under "Type" and checking whether Public or
       Private.  For example:  "Street - Asphalt; Public."  It is
       important to identify if year-round street maintenance
       does not exist.  "Public" refers to an improvement
       dedicated to and accepted by a unit of government.  It
       does not include a homeowners association.
 
10.    Topography.  Enter whether level, sloped, etc.
 
11.    Size.  Enter descriptions such as "typical," "small," or
       "large."
 
12.    Shape.  Enter site configuration, such as "triangular,"
       "square," or "rectangular."
 
13.    Drainage.  Enter whether adequate or inadequate.  If
       inadequate, be sure to explain and make requirement
       for correction, if feasible.
 
14.    View.  Briefly describe the view from the property.
       Identify a view having a significant positive or negative
       influence on the value, for example:
 
            describe view as "mountains", then enter "average",
            "superior" or "inferior" as contrasted with other
            sites.
 
15.    Landscaping.  Enter whether adequate or inadequate,
       relative to neighborhood.
 
16.    Driveway.  Enter type such as concrete, asphalt or gravel.
 
17.    Apparent Easement.  If there appears to be an easement,
       check to make sure.
 
18.    FEMA Flood Hazard.  FEMA is the Federal Emergency
       Management Agency, which is responsible for mapping flood
       hazard areas.  If any of the improvements on the property
       are within a Special Flood Hazard area, check "Yes;"
       otherwise check "No."
 
19.    FEMA Map/Zone.  Enter FEMA zone, date, map number and page
       number.  If it is not shown on any map, enter "not on
       FEMA maps."  Only those properties within zones "A" and
       "V" require flood insurance.  Zones "B" and "C" do not
       require flood insurance because FEMA designates only "A"
       and "V" zones as "Special Flood Hazard Areas."
 
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                         DESCRIPTION OF IMPROVEMENTS
 
1.     General Description.
 
       A.   Units.  Enter number of units being valued.  The URAR
            is designed for 1-4 units.
 
       B.   Stories.  Enter the number of stories above grade.
            Do not include the basement.
 
       C.   Type.  Enter "Det." (Detached), "S/D" (Semi-detached)
            or "R" (Row).
 
       D.   Design (Style).  Enter brief description using local
            custom terminology.  For example:  Cape Cod, bi-level,
            split level, split foyer, town-house, etc.  Do
            not use builder's model name.
 
       E.   Existing/Proposed.  Enter "E", "P", or "UC" (for under
            construction).  A "P" or "UC" requires plans and
            specifications for the appraiser to review.  If
            Rehab, enter "REHAB" instead of "E" or "P".
 
       F.   Age (Yrs.).  Enter actual age.  Construction records
            may be helpful if available.  Insert both the month
            and year completed where the property is less than
            two years old.  If it is over two years old, insert
            the year completed only.
 
       G.   Effective Age (Yrs.).  Enter effective age, if
            appropriate.  This is judgmental.  A range is
            acceptable.
 
            A difference between actual and effective age
            typically is caused by a level of maintenance or
            remodeling which may be below or above average.
            Significant differences between the actual and
            effective ages should be noted.
 
2.     Exterior Description.
 
       A.   Foundation.  Enter type of construction such as
            poured concrete, concrete block or wood.
 
       B.   Exterior Walls.  Enter type of construction material
            such as aluminum, wood siding, brick veneer,
            porcelain, log or stucco.  If combination show
            predominant portion first.
 
       C.   Roof Surface.  Enter type, such as composition, wood,
            slate, tile.
 
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       D.   Gutters and Downspouts.  Enter type, such as
            galvanized, aluminum, wood, plastic.  If partial,
            state location.
 
       E.   Window Type.  Describe type, such as double-hung,
            casement, sliding.  Identify the construction type
            such as aluminum, wood, or vinyl.
 
       F.   Storm/Screens.  Enter "Yes," "No" or "Partial."
 
       G.   Manufactured House.  Enter either manufactured home
            (MH) or modular (MOD), or answer "no" if not
            manufactured or modular.  If it is a manufactured
            (mobile) home, it must bear the seal signifying
            compliance with the Federal manufactured home
            construction and safety standards.
 
3.     Foundation.
 
       A.   Slab.  Enter "Yes" or "No."
 
       B.   Crawl Space.  Enter "Yes" or "No."  If partial,
            include percentage of floor area.
 
       C.   Basement.  Enter "Full," "Partial," or "None."
 
       D.   Sump Pump.  Enter "Yes" or "No."
 
       E.   Dampness.  Enter "Yes" or "No."  If damp, make
            requirement for correction.
 
       F.   Settlement.  Enter "Yes" or "No."  (Check for
            cracks.)
 
       G.   Infestation.  Enter "Yes" or "None Apparent."  Look
            for evidence of any type of insects and damage.  If
            there is any, require insect infestation inspection.
 
4.     Basement.
 
       A.   Area Sq. Ft.  Enter square feet.
 
       B.   % Finished.  Enter percentage of basement square
            footage (figure above) that is finished.
 
       C.   Ceiling.  Enter material type, such as drywall, or
            lath and plaster, or celotex ceiling panels.
 
                                   5
 
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       D.   Walls.  Enter material type, such as drywall, wood
            panel or cinder block.
 
       E.   Floor.  Enter floor type, such as asphalt tile or
            concrete.  Comment if any part is earth.
 
       F.   Outside Entry.  Enter "Yes" or "No."
 
5.     Insulation.
 
       A.   Roof.  Enter "yes" or "no".
 
       B.   Ceiling.  Enter "yes" or "no".
 
       C.   Walls.  Enter "yes" or  no".
 
       D.   Floor.  Enter "yes" or "no".
 
       E.   Check this box if no insulation anywhere in the
            house.
 
       F.   Unknown.  Check this box if unable to determine the
            presence of insulation.
 
6.     Room List.  (General)
 
       A.   Answers concerning room design and count should
            reflect local custom.
 
       B.   A dining area built as an L-shape off the kitchen may
            or may not be a room depending upon the size.  A
            simple test which may be used to determine whether
            one or two rooms should be counted is to
            hypothetically insert a wall to separate the two
            areas which have been built as one.  If the residents
            can use the resulting two rooms with the same or more
            utility, without increased inconvenience, the room
            count should be two.  If the existence of the
            hypothetical wall would result in a lack of utility
            and increased inconvenience, the room count should be
            one.
 
       C.   The room count typically includes a living room (LR),
            dining room (DR), kitchen (KT), den (DN), recreation
            room (REC), and bedroom (BR).
 
       D.   The following definitions and terms may be useful as
            a guide:
 
                                   6
 
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            1).  Basement.  Generally completely below the grade.
                 This is NOT counted in the finished gross living
                 area at the grade level.
 
            2).  Foyer.  Entrance hall of a house.
 
            3).  Level 1.  Includes all finished living area at
                 grade level.
 
            4).  Level 2.  Includes all finished areas above the
                 first level.
 
       E.   Finished Area Above Grade Contains:  To complete this
            section, enter the number of each room type on each
            level.  DO NOT enter the dimensions.
 
            1).  Enter the total room count and area Sq. Ft. in
                 the blank spaces provided in this part.
 
            2).  Enter total number of rooms, bedrooms, baths and
                 square feet of Gross Living Area (above grade).
 
7.     Interior. Surfaces - Enter the type of Materials and
                 the Condition of the material (i.e., Good,
                 Average, Fair, Poor).  Make every effort to
                 describe accurately and explain "Fair" and
                 "Poor" rating.
 
       A.   Floors.  Enter type such as tile, hardwood or carpet.
 
       B.   Walls.  Enter type such as plaster, drywall or
            paneled.
 
       C.   Trim/Finish.  Enter type of molding such as wood,
            metal or vinyl.
 
       D.   Bath Floor.  Enter ceramic, vinyl tile, or carpet.
 
       E.   Bath Wainscot.  Enter type that protects walls from
            moisture, such as ceramic tile or fiberglass.
 
       F.   Doors.  Enter type such as wood or metal, etc..
 
                                   7
 
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8.     Heating.
 
       A.   Type.  Enter hot water, steam, forced warm air,
            gravity warm air, radiant.
 
       B.   Fuel.  Enter coal, gas, oil, electric.
 
       C.   Condition.  Enter Good, Average, Fair, or Poor.
            Explain "Fair" or "Poor" rating.
 
9.     Cooling.
 
       A.   Central.  Enter "Yes" or "No."
 
       B.   Other.  Describe.
 
       C.   Condition.  Describe as with Heating.
 
10.    Kitchen Equipment.  Make an entry  X  in the boxes to
       indicate that these items exist.  An entry in a box means
       that the item was considered part of the real estate, and
       included in value.  An item that was seen, but is
       considered personal property, should have a "P" in the box
       and not be included in value.
 
11.    Attic.  Additional space such as an attic or room above
       the garage should be described in the manner in which it
       can be actually used.  The essential question is whether
       it can be included in the above-grade living area.  State
       means of access and if it is heated and finished.
 
12.    Amenities.  Make an entry  X  in all boxes of applicable
       amenities.
 
13.    Car storage.  Complete this block as follows:
 
       A.   If the property does not have a garage, carport,
            driveway or on-street parking, check "none".
 
       B.   If there is a garage, designate whether attached,
            detached or built-in and indicate the number of cars
            which may be parked, on the corresponding line.
 
       C.   If there is a carport indicate by entering the number
            of cars on the corresponding line.  Also show whether
            it is attached to or detached from the home.
 
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       D.   If there is no garage or carport, but there is a
            driveway, state "yes" and enter the number of cars
            that can be reasonably parked in the driveway.
 
                              COMMENTS
 
1.     Additional Features.  Enter here any additional features
       such as a pool size, special energy-efficient items,
       special fireplace features or other features not shown
       above or any comments you may wish to make.
 
2.     Condition of the improvements (physical, functional and
       external), repairs needed, quality of construction, etc.)
       Explain as necessary.
 
3.     List any obvious adverse environmental conditions.
       Self-explanatory.
 
       If the property was built prior to 1978, and there is
       evidence of cracking, chipping, peeling or loose paint, a
       statement should be made regarding Lead Based Paint.  The
       statement should read; "Property built prior to 1978,
       lead based paint corrective measures are required."  In
       addition, the appraiser must check the appropriate lead
       based paint requirement on the VC sheet.
 
BACK PAGE OF THE URAR FORM
 
                              COST APPROACH
 
The estimated reproduction cost of improvements is not to be
completed for existing construction; however, the estimated value
of the site must be entered.  If the subject property is proposed
construction or existing construction under one year of age, the
Marshall and Swift Form 1007 is to be completed and attached and
the box is to be completed using the figures from Marshall and
Swift calculations.
 
Under "Comments on Cost Approach" the appraiser must indicate if
the property conforms to applicable Minimum HUD/VA Standards set
forth in Handbook 4905.1.  If it does not, the appraiser should
recommend correction or rejection and explain.  If the property
is newly constructed, then it must comply with HUD Handbook
4910.1, Appendix K (24 CFR 200.926d) (as certified to by the
builder).  Also, determine if the property will be covered by a
10 year construction warranty and indicate if it is HUD-approved.
A list of HUD-approved warranty plans may be found in HUD
Handbook 4145.1, Rev-2, Change 1, Appendix 10.
 
                                   9
 
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In addition, a sketch of all improvements (house, garage,
outbuildings) must be prepared on a separate sheet of paper and
attached to the URAR (appraiser should note in "Comments on Cost
Approach" box, "See attached property sketch").  Show the gross
living area above grade for the house and the area of the garage
if attached.  Sketch should include all exterior dimensions of
house as well as patios, porches, garages, breezeways and other
offsets.  Enter "covered" or "uncovered" to indicate a roof or no
roof, such as over a patio.
 
The estimated remaining economic life must be shown in this
space.
 
                    SALES COMPARISON ANALYSIS
 
In selecting comparables, the bracketing method must be used.
Ideally, one of the comparables should be a little larger (200
sq. ft. to 300 sq. ft.); another a little smaller; and the third
should be approximately the same size (generally within a hundred
square feet of the subject).  DO NOT SELECT COMPARABLES BY SALES
PRICE.  All adjustments must be extracted from the market.  No
adjustment should be made unless it has a material effect on
value.  When an adjustment is made for location, site/view or
design and appeal, the appraiser must explain the reason.  Avoid
using three builder sales from the same subdivision, if possible.
 
1.     Address.  Enter the address that can be used to locate
       each property.  Enter community, if needed to identify
       property.  For rural properties, list location by road
       name, nearest intersection, and side road.
 
2.     Proximity to Subject.  Enter proximity in straight line
       distance, like "3 houses or one tenth of a mile W. of
       subject."  If comparable is more than 1 mile from subject,
       be sure to explain why in the "Comments" section.
 
3.     Sales Price.  Enter total paid by buyer, including extras.
 
4.     Price/Gross Living Area.  Enter price per square foot for
       living area above grade.
 
5.     Data and/or verification Source(s).  Enter date and
       verification source name(s), or others such as tax stamps,
       MLS, etc.  This is the data source(s) for the price and
       property information.  Also show type of financing such as
       Conv., FHA or VA.
 
6.     Sales or Financing Concessions.  Enter adjustment for
       sales concessions, if needed.  Be sure to explain in
       "Comments" section and use Addendum if appropriate.
 
                                  10
 
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       A.   In some areas of the country it is customary for the
            builder or seller to pay closing costs for the buyer
            and include them in the sales price of the
            property.  In other areas it may occur occasionally or
            not at all.  In those rare instances in which there
            is a market area where closing costs are the
            responsibility of the seller and are always paid by
            the seller and included in the sales price, the
            appraiser must note under "Conditions of Appraisal",
            in the Reconciliation Block.
 
       B.   Sales that are not verified and adjusted to reflect
            the terms and conditions of sale should not be used
            as market data.
 
       C.   Always select the comparables with the fewest
            dissimilarities.  Use older sales only if more recent
            ones are not available and be sure to explain in the
            "Comments" section why any comparable over six months
            old was used.
 
       D.   The value factor of Location, Site, View, Design and
            Appeal, Quality of Construction, Age, Condition, and
            Functional Utility are all subjective factors that
            require subjective adjustments.  Be careful that
            adjustments are reasonable--not excessive.  If a
            property is ever overvalued, a high probability
            exists that the reason can be traced to an excessive
            adjustment somewhere in this section.  Adjustments
            should be made only in cases where the dissimilarity
            has a noticeable effect on the value.  Small
            differences do not usually require adjustments.
 
7.     Date of Sale/Time.  Enter month and year.  This date
       refers to a date of sale.  A specific day is not necessary
       unless it is meaningful, such as in a rapidly changing
       market.
 
8.     Location.  Enter "Good," "Average," or "Fair", when
       compared to the subject and using the same standard as the
       subject.  An adjustment for location in the same
       neighborhood is seldom justified.
 
9.     Leasehold/Fee.  State whether the property is in fee
       simple or a Leasehold Estate.
 
                                  11
 
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10.    Site.  Enter size of lot.  Adjustments should be made only
       for measurable differences.  Small differences in lot
       sizes do not usually call for an adjustment if the size is
       typical.
 
11.    View.  Adjustments should be made only if the view is
       superior or inferior to the subject.
 
12.    Design and Appeal.  Enter the style according to a
       description used by local custom and show appeal as (G)
       Good, (A) Average, (F) Fair or (P) Poor.
 
13.    Quality of Construction.  Enter "Good," "Average," or
       "Fair" and the construction type such as aluminum siding,
       wood siding, brick, etc.  If a combination, show the
       predominant portion first, such as brick/frame if it is
       mostly brick.
 
14.    Age.  If both Actual and Effective age are used, enter
       both such as "A-25, E-20."  A difference typically is
       caused by modernization or significant maintenance, or the
       lack of either.  A noticeable difference is the basis for
       adjustment.  If the property is less than two years old,
       the appraiser must show the month and year of construction
       completion.
 
15.    Condition.  Enter "Good," "Average," "Fair," or "Poor"
       when compared to the subject.  Be consistent with the
       description of improvements.
 
16.    Above Grade Room Count; Gross Living Area.  Enter room
       count, which should be consistent with the description of
       improvements on the front of the URAR.  Commonly, three
       adjustments may be entered.  For example, the first may be
       an adjustment for "expendable space" such as a bath.  A
       deficiency in the number of baths should be adjusted
       first.  The second is a separate adjustment for a
       difference in square feet.  The third is an adjustment for
       room count.  These can be individual or separate
       adjustments which have been combined.  All should be
       extracted from the market.  But room count and bath
       adjustments should be on one line and square foot
       adjustment for size on another line.
 
       Typically, an appraiser will not make an adjustment for
       square feet difference and a difference in the room count.
       An example where it could occur would be a very large home
       with a small room count.  Any property that has both an
       adjustment in square feet and room count should be
       explained.
 
                                  12
 
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17.    Basement and Finished Rooms Below Grade.  Enter the type
       of improvements in the basement such as bedroom, rec.
       room, laundry, etc.  Explain any special features.  Show
       number of square feet of finished area.
 
18.    Functional Utility.  Enter "Equal," "Superior," or
       "Inferior," as a total of the items rated in the
       Improvement Analysis compared to the subject.  Be
       consistent with the factors reported there.  Use
       "Comments" section frequently and explain special
       features.
 
       The category of functional utility typically is the place
       to deduct for functional obsolescence which has been
       observed in the subject and recorded on Side 1 and which
       is not found in the comparables.  Dollar adjustments
       should be extracted from the market.  For example, a poor
       floor design that includes two bedrooms which are located
       so that entrance to one is gained by passing through the
       other typically requires a negative adjustment for
       functional obsolescence.  In such a case, the second
       bedroom would not be counted as a bedroom.
 
19.    Heating/Cooling.  Enter an adjustment for heating and
       cooling systems, if appropriate.  Any adjustments should
       be based upon local market expectations.
 
20.    Energy Efficient Items.  Enter an adjustment for any
       energy efficient items such as storm windows and doors,
       solar installations, etc.
 
21.    Garage/Carport.  Enter an adjustment for car storage.
       Adjustments should be calculated in accordance with market
       acceptance of carport value versus garage and size (one
       car, two car, etc.)
 
22.    Porch, Patio, Deck, Fireplace(s), etc..  Enter an
       adjustment for these features.  Any adjustments should be
       based upon local market expectations.
 
23.    Fence, Pool, Etc.,  Enter appropriate adjustments.  For
       example, a pool located in an area that expects pools
       might bring a dollar premium in comparison to a comparable
       without a pool.
 
                                  13
 
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24.    Net. Adj. (Total).  Check either  +  or  -  box to
       indicate if the total net adjustments will increase or
       decrease the value.  If any adjustment is excessive, the
       comparables should be reviewed to determine if the best
       ones were selected.  Any adjustment which appears to be
       excessive should be explained.
 
25.    Adjusted Sales Price of Comparable.  Total all of the
       adjustments and add to or subtract them from the sales
       price of each comparable.  Generally, adjustments should
       not exceed 10 percent for line items, 15 percent net
       adjustments and 25 percent on gross adjustments.
 
26.    Comments on Sales Comparison (including the subject
       property's compatibility to the neighborhood, etc.)
       Self-explanatory.
 
27.    Date, Price and Data Source for prior sales within one
       year of appraisal.  This is in accordance with USPAP
       standards which requires the appraiser to consider and
       analyze any prior sales of the property being appraised
       and the comparables that occurred within one year of the
       date of appraisal.
 
       Provide an analysis of any current agreement of sale,
       option, or listing of the subject property and analysis of
       any prior sales of subject and comparables within one year
       of the date of appraisal.
 
28.    Indicated Value by Sales Comparison Approach.  Select and
       enter the adjusted sales price of the comparable most
       similar to the subject.  DO NOT arbitrarily select the
       adjusted sales price which is midway between the lowest
       and highest adjusted sales price.
 
29.    Indicated Value by Income Approach.  Complete the Income
       Approach only for three- and four-unit properties.  When
       used, the appraiser is to show the gross rent from each of
       the comparables at the bottom of the form under "Final
       Reconciliation".  For example:  Comp. #1 Gross Rent =
       $1,000.00 (GRM 110); Comp. #2 Gross Rent = $1,200.00 (GRM
       108). . . etc.  The determination of the appropriate gross
       rent multiplier to use should follow the same procedure as
       in the market approach by selecting the comparable which
       is most similar to the subject property and using the GRM
       found for that comparable; or if slightly higher or lower,
       explain.
 
                                  14
 
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       The appraiser must also analyze and report on current
       market conditions and trends which will affect projected
       income or the absorption period, to the extent they affect
       the value of the subject property.  This information
       should be consistent with the neighborhood information on
       front of the URAR.
 
       If the Income Approach is not used, the appraiser should
       draw a line through the words "Indicated Value by Income
       Approach (if applicable)" and enter the estimated market
       rent.  The rest of the line items should be marked "N/A."
 
                          RECONCILIATION
 
1.     The appraisal is made:  Check the box marked "as is",
       "subject to repairs" or "subject to completion per plans
       and specifications".  The "as is" value should be used
       only if there are no repairs required or if the property
       is being rejected.  If the property is being rejected, the
       appraiser must provide an "as is" value.
 
2.     Conditions of Appraisal.  In addition to any comments
       which the appraiser wishes to make, the appraiser should
       enter taxes and insurance expenses and condominium or PUD
       common expense, as appropriate.  The appraiser must also
       enter any Valuation Condition codes (as directed by the
       local HUD Office).
 
3.     Final Reconciliation.  This entry should contain the
       appraiser's reasoning for arriving at the final value.
       The appraiser must consider all approaches to value and
       explain why one or another approach was not used.
 
4.     The appraiser enters the date the property was inspected
       then enters the value.  He/She should then sign their name
       then print their name under their signature then enter
       their assigned CHUMS ID number then enter the date the
       form is signed.
 
5.     The appraiser who performed the appraisal must sign and
       attach the appraiser's certification and statement of
       limiting conditions, which have been adopted for HUD use,
       to the URAR showing his/her certification/license number
       and expiration date and forward the complete appraisal
       package to the lender.  The appraiser should also state in
       the space provided in the Final Reconciliation section
       "See attached appraiser's certification and statement of
       limiting conditions".  A copy of these certifications and
       limiting conditions must be attached to all copies of the
       appraisal report or the report is not valid for HUD use.
 
                                  15
 
_____________________________________________________________________
 
__________________________________________________________________________
 
                    UNIFORM RESIDENTIAL APPRAISAL REPORT
 
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    *       GRAPHICS  MATERIAL  IN  ORIGINAL  DOCUMENT  OMITTED        *
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    ********************************************************************
 
___________________________________________________________________________
Freddie Mac Form 70  6-93                        Fannie Mae Form 1004  6-93
                              PAGE 1 OF 2
 
_____________________________________________________________________
 
___________________________________________________________________________
 
                    UNIFORM RESIDENTIAL APPRAISAL REPORT
 
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    *       GRAPHICS  MATERIAL  IN  ORIGINAL  DOCUMENT  OMITTED        *
    *                                                                  *
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    ********************************************************************
 
___________________________________________________________________________
Freddie Mac Form 70  6-93                        Fannie Mae Form 1004  6-93
                              PAGE 2 OF 2
 
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__________________________________________________________________________
 
     DEFINITION OF MARKET VALUE:
 
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    *       GRAPHICS  MATERIAL  IN  ORIGINAL  DOCUMENT  OMITTED        *
    *                                                                  *
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    ********************************************************************
 
___________________________________________________________________________
Freddie Mac Form 439                                  Fannie Mae Form 1004B
                              Page 1 of 2
 
_____________________________________________________________________
 
___________________________________________________________________________
 
     APPRAISER'S CERTIFICATION:
 
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    *       GRAPHICS  MATERIAL  IN  ORIGINAL  DOCUMENT  OMITTED        *
    *                                                                  *
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    ********************************************************************
 
__________________________________________________________________________
Freddie Mac Form 439                                  Fannie Mae Form 1004B
                              Page 2 of 2
 
_____________________________________________________________________
 
SUGGESTED FORMAT
 
FHA CASE NO. ___________________________          DATE ____________________
 
ADDRESS:  ________________________________________
 
          ________________________________________
 
          ________________________________________
 
          ________________________________________
 
INFORMATION REQUIRED FOR HUD APPRAISAL AND PROCESSING.
 
BUILDING SKETCH (EXTERIOR DIMENSIONS OF THE HOUSE)
 
COMMENTS: _________________________________________________________________
 
___________________________________________________________________________
 
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