FNMA and FHLMC Guidelines for Completing the URAR Manufactured Home Addendum Purpose of this Section: This section provides Fannie Mae and Freddie Mac guidelines. These supplemental instructions provide directions to the appraiser for reporting the results of a complete appraisal on property that includes a Manufactured Home using:
1. The current Uniform Residential Appraisal Report (Freddie Mac Form 70 or Fannie Mae Form 1004) or Individual Condominium Unit Appraisal Report (Freddie Mac Form 465); and,
2. The Uniform Residential Appraisal Report Manufactured Home Addendum (Freddie Mac Form 70B 10-03) or the Manufactured Home Appraisal Report Addendum (Fannie Mae Form 1004C 6-03).
The Uniform Residential Appraisal Report and the Addendum are referred to together in these Instructions as the “Appraisal Report”. 1. Definition of Manufactured Home. A Manufactured Home is a one-unit dwelling built on a permanent chassis in accordance with the National Manufactured Construction and Safety Standards Act as promulgated by the Department of Housing and Urban Development (HUD) and affixed to a permanent foundation.
Other types of factory-built housing that are not subject to the National Manufactured Construction and Safety Standards Act, such as modular or panelized housing, are not considered Manufactured Homes.
2. Appraiser Qualifications. Manufactured Homes have marketability and valuation characteristics that are different from site-built homes; therefore, you must:
> Have adequate experience and must have previously completed real property appraisals of Manufactured Homes
> Have adequate education and/or training related to the appraisal of Manufactured Homes
> Understand the unique features that affect the quality of Manufactured Homes and the factory construction techniques for Manufactured Homes
> Understand the manufacturers’ and federal, state and local requirements for the installation of Manufactured Homes
> Be knowledgeable concerning the local Manufactured Home market, and
> Have access to appropriate manufactured housing data sources to establish an opinion of value
You must not accept an assignment to appraise a Manufactured Home unless you have knowledge and experience in appraising this type of property in the subject market area. With you submittal of the Appraisal Report for a Manufactured Home, you are certifying that you meet the qualifications stated above.
3. Incomplete Information. If you appraise the Manufactured Home before it is delivered and permanently attached to the site, some of the information needed to complete the Form 70 or Form 465 and Form70B or Fannie Mae Form 1004C may not be available at the time you perform the appraisal. In that case, you may prepare the appraisal report subject to receipt and analysis of the previously unavailable information, and prepare a certificate of completion or appraisal addendum that includes your review and analysis of the previously unavailable information and certifies that the requirements and conditions of the appraisal have been satisfied. The certificate of completion or appraisal addendum must be prepared and signed by the appraiser and supervisory appraiser, if required on the Form 70 or Form 465 and Form 70B or Fannie Mae Form 1004C.
4. Neighborhood Description. You must describe the trends in the market conditions for Manufactured Homes in the subject area, including property values, supply and demand for Manufactured Homes, marketing time, price and age ranges and information regarding the terms of sale of competitive properties
5. Manufactured Home Identification. You must include the following information on the subject Manufactured Home:
> The number of sections comprising the Manufactured Home (single or multiple sections)
> For a new Manufactured Home, the retailer from whom the home was purchased
> The manufacturer’s name> Trade or model name
> Year of manufacture
> Serial number(s)/vehicle identification number(s) (VIN) for each section
> HUD label number(s) from either the HUD Data Plate or HUD certification label(s) for each section
The serial number(s) for the Manufactured Home is also known as the vehicle identification number(s)VIN. The serial number(s) is stamped on the frame front cross member of each section of the Manufactured Home or it can be found on the HUD Data Plate. The HUD label number(s) is the number that appears on the red metal HUD certification label(s) that is attached to the exterior of each section of the Manufactured Home or the HUD label number(s) that appears on the HUD Data Plate for each section of the Manufactured Home.
6. Site Information. You must provide detailed information on the site, including:
> Whether the site is on a public, community or private street and whether the street is properly maintained and with adequate access
> The size, configuration and topology of the site and the effect of site characteristics on the market acceptance, value and marketability of the property
> Confirmation that the wheels, axles, and towing hitches have been removed from the Manufactured Home
> Confirmation that the Manufactured Home is affixed to a permanent foundation system; if you cannot confirm this you must note that prominently on the Appraisal Report
> A description of the foundation type
> Confirmation that the Manufactured Home is permanently connected to a septic tank or sewage system and other utilities (e.g., water, electricity, etc.)
> Summary of comparable land sales and support for site value conclusion
7. Manufactured Home Quality. You must determine whether the Manufactured Home has total living space and individual room dimensions to be marketable and describe the overall condition of the subject Manufactured Home. You must rate the quality of construction of the subject Manufactured Home based on objective criteria such as the N.A.D.A. Manufactured Housing Appraisal Guide®, Marshall & Swift Residential Cost Handbook®, or other published cost service. You may consider characteristics such as the type of foundation, skirting, and roof pitch in determining the marketability and value of the Manufactured Home.
8. Determining Value of Manufactured Home. The appraised value of property including a Manufactured Home must be based only on the real property, including the site and the Manufactured Home. Non-realty items, such as insurance, warranties, or furniture must be excluded from the value conclusion.
9. Determining Value of Manufactured Home – Purchase Contract. For a purchase transaction, you must obtain from the lender: > A complete copy of the executed contract for sale (Form 500, Manufactured Home Purchase Agreement, for a new Manufactured Home) of the Manufactured Home and land, or if the Manufactured Home and land are being purchased separately, a copy of the executed contract for each
> A copy of the manufacturer’s invoice if a new Manufactured Home (e.g., not previously owned) You must:
> Analyze the purchase contract and review the manufacturer’s invoice, if applicable, and provide any comments in the Appraisal Report
> Match the serial number(s) from the HUD Data Plate or frame front cross member of each section of the Manufactured Home to the serial number(s) on the invoice so that you can accurately report the Manufactured Home information in the Appraisal Report
10. Determining Value of Manufactured Home – Comparable Sales Approach. The Appraisal Report must contain at least two comparable sales of Manufactured Homes of similar quality and similar configuration (i.e., single-wide comparable sales for a single-wide subject property and multi-wide comparable sales for a multi-wide subject property). You may use either site-built housing or a different type of factory built-housing as the third comparable sale if you explain the reason for selecting the comparable and make and support the appropriate adjustments in the Appraisal Report. More than three comparable sales are recommended if needed to develop an adequately supported opinion of value based on the sales comparison approach that is further supported by the cost approach to value. If the Manufactured Home is in a controlled market (such as a new subdivision or project, a newly converted project or an area where the property seller owns a substantial number of units), at least one comparable sale must be outside the influence of the developer, builder or property seller. Re-sales from within the subject project or subdivision may be used to meet this requirement. When comparable sales from outside the subject project or subdivision are used, they must also be outside the influence of the subject property's developer, builder or property seller.
You may not create comparable sales by combining vacant land sales with the contract purchase price of the Manufactured Home. If you are unable to develop an appraisal based on at least two comparable sales of similar Manufactured Homes, you must note that prominently in the Appraisal Report.
11. Determining Value of Manufactured Home – Cost Approach. You must provide a detailed and supported cost approach to determining value. The sales comparison and cost approaches to value are complementary for the valuation of manufactured housing and should support the final value conclusion. The information must be sufficient to allow the lender to replicate the cost figures and calculations. The Uniform Residential Appraisal Report Manufactured Home Addendum includes the minimum level of detail for the cost approach that should be provided. You must complete the Cost Approach section on the Freddie Mac Form 70B or Fannie Mae Form 1004C; you do not also need to complete the Cost Approach section on the Freddie Mac Form 70.
12. Determining Value of Manufactured Home – Other Sources. Traditional appraisal data sources may not provide sufficient quality Manufactured Home data for you to develop a supportable and well-documented appraisal. Although the MLS and public records information remain an important source of data, you should develop other sources such as Manufactured Home retailers and builders experienced in the installation of Manufactured Homes. You may also use the N.A.D.A. Manufactured Housing Appraisal Guide® and Marshall & Swift® Residential Cost Handbook to support your quality adjustments and value conclusions.
Manufactured Home Appraisal Report Addendum (Form 1004C)
Use of Form 1004C:
The appraiser uses this form to expand upon the information required in the Uniform Residential Appraisal Report (Form 1004) when reporting appraisals on manufactured homes. This addendum will be required as a standard exhibit to Form 1004 for all manufactured home mortgage applications taken on or after August 24, 2003.
The use of Form 1004C will help to ensure that the appraiser inspected, considered, and/or reported (as applicable) the necessary information for the property valuation and underwriting of a manufactured home. The supplemental information on this appraisal addendum will help the lender better understand the factors that may affect the value and marketability opinions and conclusions provided by the appraiser. This addendum also will require the appraiser to make supplemental certifications to address his or her knowledge and experience regarding the appraisal of manufactured homes.
Fannie Mae will continue to require market-based property valuations for manufactured homes demonstrated by a well-developed sales comparison approach to value. This means that the appraiser must develop and report in a concise format an adequately supported opinion of market value based on the sales comparison approach to value and further supported by the cost approach to value. The sales comparison and cost approaches to value are complementary for the valuation of manufactured housing and should support the final value conclusion.
This form must be printed on legal size paper using portrait format.
Instructions:
This form is completed in its entirety by the appraiser. The lender should retain the original of the completed form, and the appraiser should retain a copy. |
