The appraiser must do the following:

  • State in the space provided in the Final Reconciliation section: "See attached appraiser's certification and Statement of Limiting Conditions."
  • Attach a copy of these certifications and limiting conditions to all copies of the appraisal report, or the report is not valid for HUD use.
  • Clearly and distinctly discuss any additional or different limiting conditions to those provided in this Handbook.
  • Attach any valuation detail and support for estimates of value by the Cost and Income approaches.
  • Provide attachments for any observations of the physical aspects of the property that lead to a recommendation for a physical inspection.

Attach the following to the URAR:

  • The appraiser's certification
  • The statement of limiting conditions that HUD has adopted
  • The certification number or license number and expiration date

Then forward the complete appraisal package to the lender.



Definition of Market Value

"The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus."

Statement of Limiting Conditions and Appraiser's Certification - Contingent and Limiting Conditions

The appraiser's certification that appears in the appraisal report is subject to the following conditions: If the appraisal is based on a condition different or contrary to the conditions listed below, full disclosure of the differing limiting condition must be inserted and made known in the value estimate. Any value-influencing limiting conditions must be cited with the reporting of the estimate of market value.



Matters of a Legal Nature.

The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes good and marketable title and responsible ownership. If applicable, the appraiser must specifically change this limiting condition and address the limitations in the reconciliation of market value.

Sketch of Improvements

A sketch showing the approximate dimensions of the improvements has been provided in the report. If a sketch is not provided, the appraiser must report the lack of information to develop the sketch. Additional visual aides, such as photographs and brochures, are recommended as attachments.

Special Flood Hazard Area

The appraiser has examined available flood maps and has noted whether the property is located in a Special Flood Hazard Area. A copy of the flood map is attached to the appraisal report for any properties in a floodplain.

Court Testimony

The appraiser is not required to give testimony or appear in court because he/she performed the appraisal unless specific arrangements have been made beforehand.

Adverse Conditions

The appraiser has noted in the report any adverse conditions he/she has found. In addition, the appraiser has no knowledge of hidden conditions that would decrease the value of the property. Any observation or knowledge of adverse conditions must be reported and made apparent to the reader of the appraisal report.

Highest and Best Use Value

The appraiser has estimated the value of the land in the cost approach at its highest and best use and the improvements at their contributory value. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used.

True and Correct Sources

The information that the appraiser used in the report was all from sources that he/she considers true and correct.

Disclosure of Contents

The appraiser will disclose the contents within the appraisal only as provided for in the USPAP.

Subject to Completion of Repairs

The appraiser has based his/her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner.

Distribution of the Appraisal Report

The appraiser must provide his/her prior written consent before the lender/client may distribute the appraisal report to anyone other than those that are outlined in the URAR.


Appraiser's Certification

The appraiser must sign and certify that the following statements are true in the development and reporting of market value in this appraisal report. The appraiser must attach additional certification, if applicable, to meet specific reporting requirements for professional organizations and state certification and licensing.



Sales Comparison Analysis

The statement affirms the process in which the appraiser performed the Sales Comparison Analysis. After comparing properties to the subject, the appraiser certifies that he/she made financial adjustments based on the market to determine an appropriate price for the subject property.

Factors that Impact Value

The appraiser has considered all factors that impact value and has not knowingly withheld any significant information from the report. The appraiser has reported true and correct information for all factors.

Personal, Professional Analysis

AR stated information in the report is the personal, unbiased and professional analysis, opinions and conclusions of the appraiser.

Interest in the Property/ Discrimination Clause

The appraiser has no interest in the property and has not performed the appraisal in any way on the basis of the race, color, religion, sex, handicap, familial status or national origin of either the prospective owners or occupants of the subject property or those properties in the vicinity of the subject.

Present or Future Interest in the Property

The appraiser has no present or contemplated future interest in the subject property, and neither employment nor compensation is contingent on the appraised value of the property.

Predetermined Value

The appraiser was not required to report a predetermined value and was not encouraged to report a value that favors the cause of the client or any related party.

USPAP Conformity

The appraisal was conducted in conformity with the Uniform Standards of Professional Appraisal Practice. An estimate of reasonable time for exposure in the open market is a condition in the definition of market value and is consistent with the reported estimate of Exposure Period on the URAR.

Interior and Exterior Inspection

The appraiser has inspected both the interior and exterior of the subject property and the exterior of all comparable sales analyzed and has noted any apparent adverse conditions in the report.

Professional Assistance

If the appraiser had significant professional assistance in the performance of the appraisal or the preparation of the report, he/she must name the individuals providing significant professional assistance and disclose the tasks performed by these people.

Professional Assistance Appraiser Signature

The appraiser must note any individual providing significant professional assistance in the reconciliation. In regards to certification and agreement with the Appraiser's Certification, the appraiser who performed the appraisal must sign in this field.

Appraiser Name

The appraiser must print his/her name.

Date Signed

The date that the appraiser certifies and agrees to the Appraiser's Certification should be entered in this field.

State Certification Number

The appraiser must enter the appropriate and valid State Certification number.

State License Number

The appraiser must enter the appropriate and valid State License number (if applicable)

Expiration Date of Certification or License

Enter the date State Certification or License Number expires.


This section describes the specific conditions of the subject property that the appraiser must review and note in the Valuation Conditions Form of the Comprehensive Valuation Package. The physical condition of existing building improvements is examined at the time of appraisal to determine whether repairs, alterations or additions are necessary - essential to eliminate conditions threatening the continued physical security of the property. Required repairs will be limited to necessary requirements commonly referred to as the three S's Rule:

  • Preserve the continued marketability of the property (Saleability)
  • Protect the health and safety of the occupants (Safety)
  • Protect the security of the property (Security)

These are typical conditions that require repairs or replacements:

  • Termite damage
  • Damaged, inoperative or inadequate plumbing, heating or electrical systems
  • Broken or missing fixtures
  • Rotten or worn-out counter tops
  • Any structural failure in framing members
  • Defective paint surfaces
  • Masonry and foundation damage
  • Drainage problems
  • Damaged floors worn through to the finish
  • Broken plaster or sheetrock

The appraiser must review each of the conditions specified below and note "YES " if any of the deficiencies exist and "NO " if they do not exist, except for VC-1. Unlike the other VC's, where a "YES " mark indicates a limiting condition on the appraisal, in VC-1,"YES" renders the property ineligible and the appraisal must be returned to the lender. Guidelines are set forth below to assist in the examination of the property. To perform this analysis, the appraiser must have full access to all areas listed.

If unable to visually evaluate the improvement in their entirety, return the appraisal to the lender until a complete visual inspection can be performed. The appraiser is not required to disturb insulation, move personal items, furniture, equipment, plant life, soil, snow, ice or debris that obstructs access or visibility.

An inspection done in accordance with the guidelines listed below is visual and is not technically exhaustive. These guidelines are applicable to buildings with four or less dwellings units and their garages or carports. This inspection does not offer warranties or guarantees of any kind.

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