You can find this residential appraisal report form, along with a complete set of all residential appraisal forms, advice, updates and information on our web site at www.nemmar.com.
Operating Income Statement form. This form is used for One to Four-Family investment property and Four-Family Owner-Occupied property appraisal reports.
Use of Form 216:
The lender should use this form to determine the amount of operating income that can be used in evaluating the applicant's credit on applications for conventional mortgages that are secured by one-family investment properties and all two- to four-family properties (including those in which the applicant occupies one of the units as a principal residence).
This form must be printed on legal size paper, using portrait format.
This form is prepared either by the loan applicant or the appraiser. If the applicant prepares the form, the appraiser must also include his or her comments about the reasonableness of the projected operating income of the property. The lender should retain the original of the completed form and the appraiser should retain the copy. The lender's underwriter uses the second page of the form to calculate monthly operating income and net cash flow for the property, and to explain any adjustments he or she made to the applicant's figures.
The applicant (or appraiser) should complete this schedule by entering the current rents in effect, as well as market rents. Rental figures should be based on the rent for an "unfurnished" unit. The applicant should indicate which utility expenses he or she will provide as part of the rent and which must be paid separately by the tenants.
Income and Expense Projections:
The applicant (or appraiser) should complete all items that apply to the subject property, and should provide actual year-end operating statements for the past two years.
If the applicant prepares the Operating Income Statement (Form 216), the lender should send the form and any previous actual operating and expense reports the applicant provides to the appraiser for review and comment. If the appraiser completes the form, the lender should make sure the appraiser has the operating statements; any expense statements related to mortgage insurance premiums, owners association dues, leasehold payments, or subordinate financing payments; and any other pertinent information related to the property.
The lender's underwriter should carefully review the applicant's (or the appraiser's) projections (and, if the applicant prepared the form, the appraiser's comments concerning those projections). Based on the appraiser's comments, the lender should make any necessary final adjustments for inconsistencies or missing data.
Specific instructions for completing the projections for effective gross income follow. When the applicant will occupy one of the units of a two- to four-family property as a principal residence, income should not be calculated for the owner-occupied unit.
Operating Income Reconciliation:
The first formula in this section is used to determine the monthly operating income for a two- to four-family property when one unit is occupied by the applicant as his or her principal residence. The monthly operating income should be applied either as income or debt in accordance with the instructions on the form.
Both formulas must be used to determine the net cash flow for a single-family investment property or for a two- to four-family property that the applicant will not occupy. The net cash flow should be applied as either income or debt in accordance with the instructions on the form.