Appraisals and Inspections for Your New Property

In addition to verifying that your home's value supports your loan request, we'll also verify that your home is as marketable as others in the area. We'll want to be confident that if you decide to sell your home, it will be as easy to market as other homes in the area.

The comparable sales approach is the most important valuation method in the appraisal. A property is worth only what a buyer is willing to pay and a seller is willing to accept. The appraiser will compare the qualities of your home with other homes that have sold recently in the same neighborhood.

Using industry guidelines, the appraiser will try to weigh the major components of these properties (i.e., design, square footage, number of rooms, lot size, age, etc.) to the components of your home to come up with an estimated value of your home. The appraiser adjusts the price of each comparable sale (up or down) depending on how it compares (better or worse) with your property.

As an additional check on the value of the property, the appraiser also estimates its replacement cost. Replacement cost is determined by valuing an empty lot and estimating the cost to build a house of similar size and construction. Finally, the appraiser reduces this cost by an age factor to compensate for depreciation and deterioration.

If your home is for investment purposes, or is a multi-unit home, the appraiser will also consider the future rental income that will be generated by the property to help determine the value.

In order to qualify for our loan programs a manufactured home must meet the following requirements:

1. A manufactured home is any dwelling built on a permanent chassis and attached to a permanent foundation system.
2. The home is a one-family dwelling that is legally classified as real property.
3. The towing hitch, wheels, and axles must have been removed and the home must be permanently attached to a foundation system that meets state and local codes as well as the manufacturer's requirements.
4. Its foundation system must be appropriate for the soil conditions for the site and meet local and state codes.
5. The land on which the manufactured home is situated must be owned by you. We do not provide financing for manufactured homes located on rented or leased land.
6. The home must have been built in compliance with the Federal Manufactured Home Construction and Safety Standards that were established June 15, 1976. Generally, compliance with these standards will be evidenced by the presence of a HUD Data Plate that is affixed near the main electrical panel of the home or in another readily accessible and visible location.
7. The manufactured home must be at least double-width, 24 feet wide, and have a minimum of 600 square feet of gross living area. It also must be acceptable to typical purchasers in the market area.

We define manufactured homes as housing units that are factory built with a steel undercarriage that remains as a structural component and limits the structure to a single story. These types of manufactured homes are sometimes known as mobile homes.

We do not consider other factory-built housing (not built on a permanent chassis), such as modular, prefabricated, panelized, or sectional housing—to be manufactured housing. If your home is one of these types, please complete the application indicating that your home is a single family home.

We certainly don't expect that you'll default under the terms of your loan and that a forced sale will be necessary. However, as your lender, we'll need to make sure that if a sale is necessary, it won't be difficult to find another buyer. When we review your appraisal, we will take several steps to verify your home is marketable:

• Compare the features of your home and compare to others in your neighborhood
• Ensure the value of your home is in the same range as others in the area
• Review market statistics about your neighborhood

If you are refinancing, and an interior inspection of the home is necessary, the appraiser should contact you to schedule a viewing appointment. If you don't hear from the appraiser within seven days of the order date, please inform your lender. If you are purchasing a new home, the appraiser will contact the real estate agent (if you are using one) or the seller to schedule an appointment to view the home. We will provide you with a copy of any appraisal, even if your loan does not close.

Licensed appraisers who are familiar with home values in your area perform appraisals. We order the appraisal as soon as the application deposit is paid. Generally, it takes 10-14 days before the written report is sent to us.

One of the most important factors is determining if the project that the condominium is located in is complete. In many cases, it will be necessary for the project—or at least the phase that your unit is located in—to be complete before we can provide financing. The main reason for this is that, until the project is complete, we can't be certain that the remaining units will be of the same quality as the existing units. This could affect the marketability of your home.

Transitioning from non-owner to owner-occupied condo units could also affect future marketability, as many people would prefer to live in a project that is occupied by owners rather than renters.

We'll also carefully review the appraisal to insure that it includes comparable sales of condo properties within the project, as well as some properties from outside the project. Our experience has found that using comparable sales from both the same project in addition to other projects gives us a better idea of the condominium project's marketability.

Another item we will review is the condominium association budget. It is important that the association has a line item in their budget to set aside 10% of the annual association fees as reserves for future large projects. When associations do not place enough reserves aside and a large project is required for new roofs, parking lots, major painting, etc., then they vote to implement a special assessment. Special assessments are paid by the current owners when they should have been spread out fairly among prior owners over the life of the property.

Depending on the percentage of the property's value you'd like to finance, other items may also need to be reviewed.