Because the final estimate is a result of several calculations, the degree of precision used in the calculations could alter the final value. Therefore, it is important to remain consistent throughout the calculations. Also, consistency in rounding across appraisals is important for HUD to remain fair in determining insurance eligibility. Each value that HUD considers must be the result of the same rounding process so that values are not altered.
Significant digits determine the precision of the numbers used in calculations.
Significant numbers determine precision because precision is the closeness of the measurement, not the degree of accuracy. All nonzero digits are counted. 345 has three significant digits. Zeros that precede the first nonzero digit are not counted. 002 has one significant digit and .0001 has one significant digit.