collateral requirements and appraisal reporting job aid

Job Aid Name: Collateral Requirements and Appraisal Reporting Job Aid Job Aid ID No.: JAD20202

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Collateral Requirements and AppraisalReporting Job Aid

Table of Contents

General Collateral Requirements....................................................................................................... 2

Loan Program Specific Additional Requirements…………………………………………………………………………. 12

Property Type Specific Additional Requirements…………………………………………………………………………. 16

Parcel & Title Specific Additional Requirements………………………………………………………………………….. 17

State Specific Additional Requirements……………………………………………………………………………………….. 20

FEMA Declared Federal Disaster Areas…………………………………………………………………………………………. 22


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Section 1 Home Point Financial General Collateral Requirements for Single Family, 2-4 Family,and Condominiums

General RequirementsStop and contact AMC

AMC to contact Home [email protected]

1. Form/Product - If at any point in the appraisal process youdetermine the form/product requested is not appropriate for theproperty being appraised.

2. Unique - If the subject is a unique or atypical property (Log home,earth home or berm, floating home, Low GLA, Off Grid, etc.) pleasestop and notify Lender prior to writing the report if there are not atleast two recent similar sales to use for comparison.

3. Ineligible Properties – If the property is determined to be one of ourineligible properties: Condotels, Cooperatives, ‘on-frame’ Modular,Geodesic domes, Single-wide Manufactured, Boarding houses and/orbed and breakfast properties, Community Land Trusts, Unique homeconstructions such as built from shipping containers, trailers, railroadcarts, etc., 2-4 unit properties with ADU, properties not suitable foryear-round occupancy regardless of location, properties subject tolaws or regulations that prevent rebuilding of the propertyimprovements if damaged or destroyed, properties located in theCoastal Barrier Resources System, properties with marijuana growingregardless of allowance through state law . • Vacant land or landdevelopment properties

4. Highest and Best Use or Illegal – If current use is not the highest andbest use, or if the property has an impermissible attribute

USPAP requirementPrior Service Comment

Appraiser must provide a statement within the report WHETHER OR NOTANY prior service(s) have been performed on the subject within the lastthree years.

USPAP requirementExposure Time

Appraisers must provide an opinion of reasonable ‘Exposure Time’ for thesubject property in each appraisal where exposure time is a component ofthe value definition.

Transaction Amount Greaterthan $1,000,000

Appraisals with a transaction amount greater than $1,000,000 and oris a complex assignment, must be completed by a Certified Appraiser.A State Licensed appraiser is qualified to appraise non-complex one to fourunits having a transaction value* less than $1,000,000 and complex one tofour residential units having a transaction value less than $250,000. Thisclassification does not include the appraisal of subdivisions. Transactionvalue to mean loan amount in a refinance transaction and sale price in thepurchase transaction.


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Conventional Reports only/SiteCondo

CONVENTIONAL Site Condos may be submitted on either the 1073/Condo or1004/URAR appraisal form. However, when the 1004/URAR form is used, thefollowing Condo-specific information is also required:

1. Project Attachment Type (Detached or Attached)2. Project Design Type3. Project Unit Dwelling Count (# of Units)4. # of Project Dwelling Units Sold (# of Units Sold)

* NOTE: Please provide this information in the Additional Comments sectionor in a condo addendum.When the 1073/Condo form is used, the deeded lot utility needs to bereconciled in the report:

1. Ensure the lot utility is described.2. Include comps with similar lot utility.3. Include the lot size/utility in the market grid and reconcile in the

value opinion.Requirements by Report Section

Subject SectionUtilities Regardless of occupancy, appraiser to comment if ALL utilities were turned

"ON" and functioning properly at time of inspection.If the utilities were NOT operational, the report to be make "subjectto" re-inspection with confirmation on and in working order. – FHAONLY

If any of the utilities appear NOT to be working properly, the report to bemade "subject to" the repair, (or inspection by licensed professional in the

field) of the deficient utilities.Solar Panels If the property has Solar Panels the appraiser must provide commentary on

whether they are owned or leased by the borrower and if the propertymaintains access to electric utilities consistent with community standards.Additionally, if owned, the report should clearly state if the solar panels are apermanent fixture(s) or if the solar panels are personal property. Lastly, themarket’s reaction to the solar panels should be supported by analysis andinclusion of comparables or market evidence.

Listing History Data Source Please indicate specifically if the MLS was utilized for researching theSubject's listing history on page one. If the MLS was not used, explain why.

Recent List Price vs. Opinion ofMarket Value

When the Subject's Opinion of Market Value exceeds its most recent listprice, commentary must be provided explaining the difference.

Neighborhood SectionPresent Land Use ‘other’ If ‘other’ land use is designated, the appraiser must designate what that use

is.

Predominant Value If the subject's final opinion of value is 10% greater than or less than thepredominant neighborhood sales prices, commentary required to addressdifference. E.g. is the subject an over or under-improvement for marketarea? Is the subject superior or inferior in condition compared to other


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homes in the neighborhood? Does this difference in value create amarketability issue? Etc.

Site SectionZoning Compliance/Illegal Whenever the Subject's zoning is designated as 'illegal', the appraiser must

STOP & NOTIFY Lender who will direct the appraiser whether to proceed withthe assignment

Zoning Illegal use/ Due toUnpermitted Addition

If research or the Subject inspection reveals evidence of any additions ormodificationsof square footage to the GLA, the appraiser must provide thedue diligence necessary to determine whether the construction was legallypermitted, and if it was not, whether the Subject is now illegally zoned.

1. If the Subject is still legally zoned, proceed with the appraisal.2. If the Subject is now an ILLEGAL USE, as a result of the

unpermitted addition, please STOP & NOTIFY Lender.– The Lender may request additional information to complete appraisal'subject to' obtaining a legal zoning permit or the removal of the illegaladdition.

Private Street In the event the subject is located on a private street:1. Confirm if the private street location impacts marketability.2. Verify if there is a road agreement in place.3. Disclose who maintains the road.4. Disclose any fees to maintain the road.5. Include comparables in the market approach with similar

impact/location.Zoning Compliance/Legal

nonconformingWhenever the Subject's zoning is designated as 'legal nonconforming', theappraisermust address:

1. Can the Subject be rebuilt to present density if destroyed2. Site source used to verify (e.g. Zoning Dept. phone number, with

contact name and title)3. If cannot be rebuilt, what is the effect on subject's marketability &

value4. Include comparables with similar nonconforming zoning

Outbuildings Appraiser to provide specific commentary for any property with large andmultiple outbuildings. Indicate if the Subject is a working farm, if the highestand best use is residential, and any positive or negative impact of theoutbuildings on marketability.

Non-Public Utilities Appraiser to comment if non-public utilities are common for the market andacceptable per community standards. Comparables with similar privateutilities should be reconciled in the market approach to supportsalability/market acceptance.

Improvements Section


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Garage Conversion/ RoomAdditions- Unpermitted

When the Subject is determined to have had a garage conversion or roomaddition, the Appraiser must treat room additions and garage conversions aspart of the GLA of the dwelling, provided that the addition or conversionspace:

1. Is accessible from the interior of the main dwelling in afunctional manner.

2. Has a permanent and sufficient heat source.3. Was built in keeping with the design, appeal, and quality of

construction of the main dwelling.

Room additions and garage conversions that do not meet the criteria listedabove are to be adjusted for in a separate line item in the sales grid, not inthe GLA. The Appraiser must address the impact of inferior quality garageconversions and room additions on the marketability of the subject property.Once the effects of the addition or conversion are established, thenContributory Value, if any, should be addressed in the report. The Appraisermust analyze and report differences in functional utility when selectingcomparable properties of similar total GLA that do not include convertedliving space. If the Appraiser chooses to include converted living spaces asGLA, the Appraiser must include an explanation detailing the composition ofthe GLA reported for the comparable sales, functional utility of the subjectand comparable properties, and market reaction. Alternatively, the Appraisermay consider and analyze converted living spaces on a separate line withinthe sales comparison grid, including the functional utility line, to demonstratemarket reaction. The Appraiser must not add an ADU or secondary living areato the GLA.

Subject’s Condition reported asC5 or C6

When the Subject is reported to be in C5 or C6 (below average) condition, thereport must be made 'subject to' the repairs/inspections required to bring theSubject up to C4 condition AND the following are required:

1. A description of repair/inspection items.2. Overall condition rating which reflects the 'as-improved' condition3. Comparable sales that reflect the 'as-improved' condition4. Demonstrative photos of all repair items.

Security Bars The appraiser must report when the property has security bars on bedroomwindows or doors. Appraiser must also comment if quick releases areinstalled and if they meet city code. If bars are present and quick releases arenot, the report should be subject-to their installation or removal of bars.

Accessory Units (ADU) If the subject has an accessory unit or a second kitchen the following needs tobe addressed:

1. Is it legal per local zoning?a. If yes, then would this be considered a Multi-unit? Please provide

your analysis of highest and best use.b. Can it be rented out to a non-family member?c. Is it metered separately?d. Is it permitted?


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e. Please remove from GLA and adjust on a separate line.f. Can at least two comparable sales w/similar legal accessory units

be provided to demonstrate market acceptance? Commentary isrequired to explain if such Comps are not available.

2. If it is not legal per local zoning:a. Remove it from GLA.b. Was it completed in a workmanship similar to the subject?c. Please adjust for the market’s reaction on a separate line.d. Provide estimated cost to return Subject property to a legal

zoning status?3. Provide photos of ALL rooms within the ADU

Sales Comparison Section (Grid)Adjustments /

UAD Requirement The UAD provides specific direction for notating adjustments whenComparable features differ from the Subject.– When a Comp line item description is NOT exactly the same as thecorresponding line item description for the Subject and NO adjustment isgiven, the UAD requires the field to be completed with a zero (0) to verify theappraiser noted the difference but chose not to make an adjustment.

Active Listings Home Point Financial requires TWO (2) listings with applicable list price/salesprice grid adjustments to bracket/support presented opinion of value orsufficient analysis to substantiate that current listings in the market supportthe value opinion.

Similar Comparables When a majority of the comparable sales differ significantly from the Subjectproperty in either: location, quality of construction, condition, GLA oramenities, Home Point Financial requires detailed commentary explainingwhy these were the best comparables available and what search parameterswere utilized.

New or Proposed Construction When the Subject is new or proposed construction, Home Point Financial hasthe following requirements:

1. At least one sale must be from within the Subject's development2. At least one sale must be from a competing development (outside the

influence of the Subject's builder/developer) and3. All builder sales must be verified by an independent source (i.e. MLS,

HUD-1, Assessor, etc.)Comparable Selection/

DistanceComparable sales located within the Subject's immediate neighborhood aredesired. If the appraiser utilizes comparable sales outside of the Subject'sneighborhood when closer comparable sales appear to be available, it isrequired the appraiser provide an explanation as to why they used the specificcomparable sales in the appraisal report.– Additionally, for urban and suburban properties, please commentspecifically regarding the necessity of using any comparable sale locatedgreater than one mile from the Subject.– For rural properties, please comment specifically regarding the necessity ofusing any comparable sale located greater than five miles from the Subjectand indicate if the distance is typical for the market.


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Comparable Selection/ BracketSales Price

The ACTUAL Sales Prices of the closed comparable sales should bracket theappraiser's opinion of market value whenever possible, even if it is necessaryto add a less similar closed sale requiring a greater percentage of adjustmentsto accomplish this.

– If it is not possible to bracket your opinion of value with the actual SalesPrices of the comparable sales, please provide a specific explanation WHY thisrequirement could not be met.

Comparable Selection/Declining Market/ 2 Closed

Sales within 90 Days

In a Declining Market, the following Date of Sale guidelines for CLOSED salesapply to all assignments:

1. Appraiser should provide two sales closed within 90 days of theeffective date,EVEN IF it is necessary for the appraiser to extend the searchparameters.

* Comps less proximate or with somewhat less similar features, requiringgreater than typical adjustments, are acceptable.

2. If, in your opinion, the '90 day' sales are not the best indicatorsof value, please provide additional Comps from an expandedsearch up to 6 months.

* Describe why you consider the less recent sales to be better indicators ofvalue and how you weighted all comparable sales in your SCA reconciliation. If sales older than 90 days are provided, please make the appropriate timeadjustments and discuss how the adjustment amounts were reconciled.

Comparable Selection/ MarketInfluenced by REO/ Distressed

Sales

When the market is influenced by REO/Short/Distressed sales (though not100%), the appraiser must provide the following:

1. A mix of arm’s length and distressed sales when available and/orappropriate for comparison. This helps to reflect the market.

2. Explain the use of REO/short/distressed sales and provide theappropriate adjustment for being distressed if the market warrants.

When the subject is a condo: If the subject’s project is 100% distressed sales,commentary is provided discussing. What is the cause (builder, area, etc.) ofthe distressed sales? Sales both in the project and in competing projects areprovided.

Comparable Selection/ UniqueProperties

If the Subject is a unique or atypical property type (e.g. log home, A-frame,modular, low GLA, etc), the appraisal must include at least two recent sales ofsimilar construction style and/or features for comparison to the Subject.Please extend the data search into similar and competing markets ifnecessary to satisfy this requirement.

Days On Market Days on market must be reported for the Subject property (purchasetransactions) and each comparable (sales, actives & pendings). Commentaryrequired if the comparables DOM exceed marketing time for the subject’sneighborhood.

Comparable Data & VerificationSources

At least one data source and one verification source is required for Eachcomparable sale. Approved Data & Verification sources include anycombination of the following, but are not limited to: MLS, Assessor, Tax


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Records, Deed Records, HUD-1, other appraisers (provide name and number),appraiser files, closing documents, and other parties to the comparabletransaction (real estate agents-provide name and number, buyer or seller.

1. Unacceptable responses/sources: - ‘Public/County records’ is toogeneral and is NOT acceptable. The specific type of public recordMUST be indicated. ‘Exterior inspection’ is NOT a valid verificationsource as it provides no information regarding the comparablepurchase transaction.

2. When Comparable sales data is provided by parties that have afinancial interest in either the sale or financing of the SubjectProperty, the appraiser must verify the data with a 3rd party thathas NO financial interest in the transaction

*Exception* For new construction, a fully executed (signed) Closing DisclosureStatement is typically acceptable as either a data or verification source as it isoften one of the only reliable sources of data available.

Sales Concessions If the comparable sales indicate sales concessions, the following is required:1. Both the specific type of concession and the amount of the

concession must be reported in the description column. ('Typical'is not an acceptable explanation.)

2. The amount of the adjustment given must be reported in theadjustment column. The adjustment given should reflect thedifference between what the comparables actually sold for with theconcessions and what they would have sold for without them.

3. If a concession amount is noted, but NO adjustment is being given(indicated as $0), please describe why you believe an adjustment isnot necessary.

* NOTE: Per FNMA guidelines: "Positive adjustments for sales or financingconcessions are not acceptable."

Condition & Age Adjustments Any adjustment given to the comparable with the same condition and/or age(either positive or negative) must be specifically explained within the reportnarrative, including a description of the information observed by theappraiser leading to the necessity for each adjustment.

Prior Sales/ Transfer History/Subject

When the Subject's Prior Sale/Transfer History indicates a sale within the past3 years that differs by more than 5% from the current Opinion of MarketValue, commentary is required to explain the value difference.– e.g. Was the property sold previously at a below market price due to sometype of distressed or non-arm's length transaction? Have property valuesdeclined or increased substantially since the prior sale date? Has the propertybeen significantly altered, updated, or remodeled since the prior sale to adegree that would account for any noted increase (as reflected on page 1 ofreport)?

Summary of Sales ComparisonApproach

Home Point Financial requires that the appraiser provide a brief, but specific,explanation of the reconciliation of the Sales Comparison Approach to Value.This includes commentary within every appraisal report explaining how thecomparable sales were weighted and the logic/analysis used in making thoseweighting decisions.


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– e.g. Comp #1 was weighted most heavily in establishing the reconciledSCA because it has the most similar features to the Subject, required theleast adjustments and is the most recent & proximate sale. Comp #2supported the final value. No weight was given to Comp #3 due to itslocation outside the immediate neighborhood and much larger Site.* NOTE: Percentage weighting is another accepted approach, but it must beaccompanied by a brief explanation.

Search Parameters Describe the parameters/criteria used in your comparable search, includingthe actual time frame, distance, age, GLA, style, etc. used in the research forComps. Avoid dollar-based search criteria.– FOR EXAMPLE ONLY: “In my research for comparables, I used the followingparameters: Homes closed in the past 6 months, within 3 mile radius of theSubject, built between 1960-70, within 250SqFt of Subject, 2-Story, etc.”

Multipliers for Unit/Rm/Bdrms-Multi Family 1025 Form

Multipliers for Unit/Rm/Bdrms should be bracketed by the Adjusted Price PerUnit/Rm/Bdrms of the comparables. If not available, provide additionalcommentary explaining how appraiser derived their Multipliers to figureValue per Unit/Rm/Bdrms.

Required Commentary When the opinion of value is NOT supported by the adjusted sales prices ofthe majority of comparable sales, Home Point Financial requires detailed andspecific commentary to explain the reconciliation of value.

Cost Approach SectionCompletion Requirements The Estimated Remaining Economic Life and Opinion of Site Value are

requiredwithin every report. ** The entire cost approach only needs to be completedif the appraiser feels it is warranted.**

Site Value Exceeds 30% ofOpinion of Market Value

When the Subject's 'Opinion of Site Value' exceeds 30% of the final 'Opinionof the Market Value', the appraiser must provide commentary within thereport that addresses each of the following questions:

a. Is a Site value to Market Value ratio of this size typicalfor the market?

b. Does a Site value ratio of this size have any impact onthe Subject's marketability & value?

PUD Information SectionPUD HOA/ Pending Litigation When the Subject property is located in a PUD, please provide the following

comment: – 'I am/am NOT aware of any pending litigation involving theSubject property's HOA.' Explain if any of this information is not available inthe normal course of business.* NOTE: If the appraiser IS aware of any pending litigation involving the HOA,please provide the following:

· Data source including Name, Title (if applicable) and PhoneNumber.

· A brief summary of the nature of the lawsuit and any potentialimpact on the value & marketability of the Subject property.


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Building Sketch SectionSketch/ Required for ALL

interior AppraisalsA sketch/floor plan (with exterior dimensions, unit labels, room labels, andGLA calculations) is required for all interior appraisal assignments.– During the inspection, the appraiser is required to take physicalmeasurements of the exterior dimensions of the improvement, EVEN IF usinga third-party data source (e.g. blueprints, assessor's sketch, etc.). Theappraiser's measurements should be the data used to calculate the GLA ofthe Subject property.

– The appraiser should comment regarding any significant differences(greater than 10%) between their own measurements and any published bythe local assessment/taxing authority.

Photo SectionSubject Interior Photos

RequiredInterior photos of all rooms noted in the Improvements section are desired;however, in order to pass QC, the following photos are required:

· Kitchen(s)· ALL baths (including ½ baths and powder rooms)· Bedrooms· Main living area· Any additional finished areas (e.g. BASEMENT, attic, accessory unit,

etc.)· Any recent updates (e.g. remodeling, renovation, restoration, etc.)· Any value contributing amenities (e.g. detached garage, deck, porch,

pool, etc.)· Any visible physical deterioration

* NOTE: Please avoid photos containing people or portraits, as these mayviolate Fair Housing Laws.

Subject/ Accessory Unit Photos If the Subject is a single-family home with an accessory unit, interior andexterior photos of the accessory unit are required. Please label themaccordingly so that the reader can clearly identify the photos for each unit.

Subject/ Multiple Buildings/Exterior Photos Required

If units for a multi-family Subject property are located in multiple buildings,exterior photos of all buildings are required. Label them accordingly so readerof report can identify the photos for each building and unit(s).

Access If the appraiser is unable to gain access to any part of the property beingappraised, complete assignment and reflect “subject to inspection”. (Allrooms and/or areas must be viewed)

Location MapCrossing Major Boundaries If major boundaries are crossed for comparables, commentary is provided

discussing if the markets are similar and/or how they differ.

Aerial Map An aerial photo centered on the Subject property and displaying an area witha 1-mile radius is required, with particular attention paid to any adverse


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external influences affecting the Subject property. When such influences areobserved, the following information is required:

· Detailed disclosure of the indicated adverse influence(s)· Explanation of effect on the Subject's marketability and value· Comparables with the same influence AND· Demonstrative photos OR commentary if any of these requirements

cannot be satisfied.

Completion ReportCompletion Report Provide front photo of residence and all final completion items requested. If

new construction – provide photos of ALL rooms including all exterior sides ofresidence.


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Section 2 Loan Program Specific RequirementsFHA

FHA Case # The case # should be clearly identified within the appraisal report.FHA Intended User Statement The intended user statement should reflect Home Point Financial and

FHA/HUD. Comments that mirror Handbook 4000.1 which says “FHA and theMortgagee are the intended users of the appraisal report” is acceptable.

Overhead Electric Power Lines Appraiser must report if power lines pass directly over the dwelling, pool,water features or any other structure on the property. If the subject suffersany obsolescence from towers/power lines, this should be disclosed andreconciled consistently within the report.

Non-Residential Use If any portion of the subject property has a non-residential use that is legallypermitted and conforms to current zoning requirements, the appraiser mustcalculate the non-residential portion of the total floor area and provide thepercent in the report.

Site Condominium The appraiser must report the appraisal on Fannie Mae Form 1073/FreddieMac Form 465, Individual Condominium Unit Appraisal Report.

Attic & Crawl If the subject has an attic or crawl:Attic Observation Requirements – Photos Required

1. •The Appraiser must perform a head and shoulders observation ofthe interior of all attic spaces

2. •The Appraiser is not required to disturb insulation, move personalitems, furniture, equipment or debris that obstructs access orvisibility. If unable to view the area safely in their entirety, theAppraiser must contact the AMC/Mortgagee and reschedule a timewhen a complete visual observation can be performed.

3. •If there is evidence of a deficient condition (such as a water-stainedceiling, insufficient ventilation, or smell of mold), the Appraiser mustreport this condition, and render the appraisal subject to inspectionand repairs if necessary.

4. •An observation performed in accordance with these guidelines isvisual and is not technically exhaustive.

Crawl Space Observation Requirements – Photos RequiredThe Appraiser must complete a visual observation by a minimum of headand shoulders entry of all areas of the crawl space and notify the Mortgageeof the deficiency of MPR (Min property requirements) and MPS (Min propertyStandards) when the crawl space does not satisfy any of the following criteria:

1. •The floor joists must be sufficiently above ground level to provideaccess for maintaining and repairing ductwork and plumbing.

2. •The crawl space must be properly vented unless the area ismechanically conditioned.

3. •The crawl space must be free of trash, debris, and vermin.4. •The crawl space must not be excessively damp and must not have

any water pooling. If moisture problems are evident, a vapor barrierand/or prevention of water infiltration must be required.


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Storage Tanks Stationary Storage tanks (Oil, gas, etc.) above or below ground must beaddressed in commentary. The appraiser must report if there are signs ofleakage and the effects they have on the marketability.

Mineral and Oil Reservations The appraiser must analyze and report the degree to which residentialbenefits may be impaired or the property damaged by the exercise of rightsset forth in oil and gas and mineral reservations. (Analyze and include asummary of the effect that includes: 1) Impairment; 2) Property Damage; or3) Environmental Concerns.

Mining Areas In mining areas, the Appraiser must analyze and report the depth or extent ofmining operations and the site of operating or abandoned shafts or tunnels todetermine if the danger is imminent, probable or negligible.

Soil & Drainage The appraiser MUST observe, analyze and report on the readily observablesoil conditions, the readily observable grade, and the readily observable siteconditions including, but not limited to, drainage.

Accessory Dwelling Unit (ADU) An Accessory Dwelling Unit (ADU) refers to a habitable living unit added to,created within, or detached from a primary one-unit Single Family dwelling,which together constitute a single interest in real estate. It is a separateadditional living unit, including kitchen, sleeping, and bathroom facilities. Aspart of the highest and best use analysis, the Appraiser must make thedetermination to classify the Property as a Single Family dwelling with anADU, or a two-family dwelling. The conclusion of the highest and best useanalysis will then determine the classification of the Property and the analysisand reporting required.An ADU is usually subordinate in size, location and appearance to the primaryDwelling Unit and may or may not have separately metered utilities orseparate means of ingress or egress. The Appraiser must not include the livingarea of the ADU in the calculation of the Gross Living Area (GLA) of theprimary dwelling.The Appraiser must notify the Mortgagee of the deficiency in MPR or MPS ifmore than one ADU is located on the subject Property or if an ADU is presenton a multi-family property

Closed Sales The report to include 3 sales that have closed within 12 months of theeffective date.

Single Line/Net/Gross %Adjustments

When a single line, net, or gross adjustment exceeds 10%, 15% or 25%,respectively, of the Actual Sale Price (or offering price for listings/pendings),commentary should be provided to explain the reason(s) for not using a moresimilar comparable.

Water Heater The appraiser must examine the water heater to ensure that it has atemperature and pressure-relief valve with piping to safely divert escapingsteam or hot water. If does not meet MPR report to be completed “subjectto.”


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FHA Min RequirementsComment

Verify that existing dwellings meet HUD Minimum Property Requirements(MPR) as outlined in the Handbook 4000.1 FHA Single Family Housing PolicyHandbook.

Verify that New Construction dwellings meet both HUD Minimum PropertyRequirements (MPR) and Minimum Property Standards (MPS) as outlined inthe Handbook 4000.1 FHA Single Family Housing Policy Handbook.

Well & Septic Appraiser is to comment if Well & Septic meet min FHA requirements.1. If the appraiser cannot identify location of the well & septic,

provide commentary and disclose if they saw any negativeitems (standing water over tank area, smells, etc).

2. Appraiser to disclose if Public Utilities are available.3. If the Property has a Shared Well, the Appraiser must report it and

note any readily observable deficiencies. The Appraiser must alsoobtain a Shared Well Agreement and include it in the appraisal reportso that the Mortgagee may review the agreement to determineeligibility. The Appraiser must also require an inspection under thesame circumstances as an individual well.

Subject Photos Photos of all sides of the subject are required. A photo of any item that maynegatively affect the subject’s value.

Sketch Appraiser must reflect all Porches/Patios/decks and disclose on the sketch ifthey are covered or uncovered.1. Show the location of the wells and septic system and note distances ifavailable.2. Show all exterior dimensions including: house, patios, porches, garages,breezeways and other offsets.

Paint If chipping/Peeling paint on homes built prior to 1978 is noted, Photos andcommentary must be provided. The report should be “subject to” the remedyof those noted.Any exterior bare wood should be disclosed, and the report made “subjectto” it’s covering with paint or sealant.

Roof The Appraiser must report if the roof has less than two years of remaining lifeand make the appraisal subject to inspection by a professional roofer.When the Appraiser is unable to view the roof, the Appraiser must explainwhy the roof is unobservable and report the results of the assessment of theunderside of the roof, the attic, and the ceilings.

Pools Swimming pools must be operational. If the pool has been winterized, theappraiser must complete the appraisal with the extraordinary assumptionthat the pool and its equipment can be restored to full operating condition atnormal cost.


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USDAIntended User Statement The intended user statement should reflect Home Point Financial and

USDA.FHA Min Requirements Comment Verify that existing dwellings meet HUD Minimum Property Requirements

(MPR) as outlined in the Handbook 4000.1 FHA Single Family HousingPolicy Handbook.

Verify that New Construction dwellings meet both HUD Minimum PropertyRequirements (MPR) and Minimum Property Standards (MPS) as outlined inthe Handbook 4000.1 FHA Single Family Housing Policy Handbook.

FHA Roster Appraiser Comment A comment stating the appraiser is an FHA Roster Appraiser is requiredwithin the appraisal.

Single Line/Net/Gross %Adjustments

When a single line, net, or gross adjustment exceeds 10%, 15% or 25%,respectively, of the Actual Sale Price (or offering price for listings/pendings),commentary should be provided to explain the reason(s) for not using amore similar comparable.

EDGERefinance with Increase in Value

Due to ImprovementsOn properties that have been owned by the current owner for <= 12months that have increased in value from the purchase price due toimprovements/updates, the appraiser must include commentary forcontributory value of those improvements

Accessory Units (ADU) If the subject property has an Accessory Unit (ADU)3 comparable sales with similar additional accessory units arerequired

Fannie Mae HomeStyle'Homestyle' Refinance For FNMA 'Homestyle' REFINANCE assignments, appraisals provided should

be valued as completed (subject to).

203K203k/Work Bids All 203k report must contain a copy of the following:

Streamline – Bids of the required work provided to the appraiser.Full 203K – An FHA approved 203k consultants write up of bids is required.

Required 203K Commentary For a 203K assignment, Home Point Financial requires that the appraiserdistinguish between condition deficiencies affecting safety, security,structural soundness, etc. and those that are merely cosmetic in nature.Health and safety deficiencies should always be made 'subject-to' repair,while cosmetic deficiencies should be identified but not conditioned andaddressed with a cost-to-cure adjustment.


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Section 3 Property Type Specific Additional Requirements Manufactured Home

Required Form Type Manufactured Home appraisals must be completed on the 1004Cform

Stop and Notify the AMC/ Home PointFinancial

Stop the assignment and reach out to determine how to proceed if aManufactured home is any of the following:

1. Single-wide2. Co-operatives (Co-ops)3. Built prior to June 15th 19764. The floor area is less than 400 square feet5. The home is not on a permanent foundation6. No HUD Certification Label is affixed to the home

Specific Required Photos A photo is required of the affixed HUD Certification Label, withadditional commentary in the report describing its location

Modular HomeModular Comparable Comparables may be stick built or modular.Modular Commentary The appraiser should provide a comment addressing the

marketability and comparability of modular homes in the subjectmarket.


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Section 4 Parcel and Title Specific Additional Requirements Multiple Parcels

Requirements If a property includes multiple Parcels the following is required inthe report:

1. Verify that all PINs (Parcel Identification Numbers)are included in the property description.

2. Verify that all legal descriptions are included in theproperty description.

3. Verify that the end user can clearly understandwhich site improvements are on each parcel.

4. Confirm if the parcels are deeded together.5. Confirm if the parcels can be sold separately.6. Confirm that the parcels have the same Highest and

Best Use as the primary residential parcel.7. Confirm the impact on marketability.8. Confirm that the lots are contiguous.9. Confirm that all parcels have road frontage or

disclose if any parcel is land locked by another.10. Confirm that all parcels have the same

public/private utilities.11. Address Excess Land or Surplus Land and it impact

on marketability.12. Incorporate a survey or plat map in the report.13. Describe all Easements and Encroachments and

their impact on marketability.


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Deed RestrictionsRequirements If a property has deed restrictions the following is required in the

report:1. Disclose the restriction in the report and address

marketability.2. Review and Analyze the deed in the addendum.3. Include comps with similar deed restrictions.

Include appropriate labeling in the market grid ofcomps with similar deed restrictions.

4. Comps data should be clearly labeled to verifywhen resale restrictions terminate and when theysurvive foreclosure or recordation of a deed-in-lieuof foreclosure.

5. Confirm Reconveyance or resale restrictions and ifthe deed survives foreclosure.

6. Verify what/who controls the resale restrictions,typically it falls to the subsidy provider or aprogram administrator.

7. When a property has resale-restrictions thetimeline for the right of first refusal needs to beverified in the analysis.

8. Confirm if there are any transfer fees.9. Provide multiple opinions of value if relevant. For

example, a deed restriction based upon income willhave a formula in the deed. This formula will needto be disclosed, analyzed and reconciled within theaddendum to provide the restricted value.

10. Reports must contain the following statement tobe acceptable to FNMA: "This appraisal is made onthe basis of a hypothetical condition that theproperty rights being appraised are without resaleand other restrictions that are terminatedautomatically upon the latter of foreclosure or theexpiration of any applicable redemption period, orupon recordation of a deed-in-lieu of foreclosure."


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LeaseholdRequirements If the subject property is secured by a leasehold estate or subject to

the payment of ground rent the following is required:1. Appraiser must provide a thorough, clear, and detailed

narrative within an addendum that identifies the terms,restrictions, and conditions regarding lease agreements orground leases and any effect it has on the value andmarketability

2. When available comparables with similar leasehold shouldbe included


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Section 5 State Specific RequirementsArizona Effective 08/02/12 (HB2778) require the AMC fee paid to the

appraiser to be disclosed in the appraisal report

Colorado Effective 07/01/13 (HB1110) requires the AMC fee paid to theappraiser to be disclosed in the appraisal report.

California General Hot Water Heater – For all interior appraisals in California, HomePoint Financial requires the appraiser to provide a comment andphoto to verify whether or not the hot water tank was 'doublestrapped' at the time of inspection and, if it was NOT, the reportmust be made 'subject to' the required installation.Carbon Monoxide Detectors - For all interior appraisals inCalifornia, Home Point Financial requires the appraiser to verify theinstallation of at least one Carbon Monoxide (CO) Detector in all 1-4 unit properties which have a fireplace, gas/oil burning appliance,or attached garage. Please provide a comment and photo verifyingthe installation of at least one CO Detector in the Subject dwelling(or per unit). If there were NO Carbon Monoxide Detectorsinstalled at the time of the inspection, Home Point Financialrequires the report be made 'subject to' installation.

California-LA County When the Subject’s car storage appears to be atypical for marketdue to alteration, removal or found inadequate, potentiallyaffecting legal zoning compliance, Home Point Financial requiresappraiser contact local Zoning authorities and confirm the legalityof car storage. Provide the following within the report:

1. A statement confirming the subject’s zoning compliance forcar storage

2. Name and phone number of contact with Zoningdepartment

Illinois The Illinois State Appraisal Board require the following disclosurebe provided within narrative of certification of each assignment:

1. Identify the AMC as the Client (if applicable)2. Identify the Lender as the intended user3. Disclose the AMC fee paid to the appraiser (if applicable)

Louisiana Louisiana statute (HB 1014) require that the AMC fee paid to theappraiser be reflected in the appraisal report.

Montana Montana statute (HB 0188) requires the AMC’s approvedregistration number be reflected in the appraisal report.


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Nevada Nevada statute (NAC 645C.389) requires both the AMC fee paid tothe appraiser and fee retained by the AMC are reflected in thereport.

New Mexico New Mexico administrative code (16.65.2.12 NMAC) requires boththe AMC fee paid to the appraiser and fee retained by the AMC arereflected in the report.

Utah Utah administrative code (R162-2e-304) requires both the AMC feepaid to the appraiser and fee retained by the AMC are reflected inthe report.

Vermont Vermont statute (HB420) requires the AMC’s approved registrationnumber and fee paid to the appraiser be disclosed within theappraisal report adjacent to or below the AMC name. Pleasereport the AMC name, AMC registration number and fee incommentary.

Virginia Code of Virginia (54.1-2001) requires the AMC fee paid to theappraiser is disclosed within the appraisal report.


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Section 6 Federal Disaster AreaCompleting a Report in a FEMA DeclaredDisaster Area

If the appraiser notes the Subject property is located in a FEMAFederal Disaster Declaration Area or an area which may bedeclared a disaster area, the appraiser must provide information onthe following:

· If the Subject property DID sustain damage as a directresult of the disaster and:

§ If the damage was minor, cosmetic and/or did notrise to the level of a Health & Safety concern,please provide an 'as-is' report with:

· Detailed commentary & photos describing the 'disaster-related' damage and recommended repairs

§ A corresponding cost-to-cure/condition adjustmentto address the impact of the damage, ifappropriate.

· If the damage created a Health & Safety issue orsignificantly impactsto marketability and/or value, please provide a report'subject to' the required repairs and/or professionalinspections with:

§ Detailed commentary describing the extent of thedamage and required repairs

§ Demonstrative photos of damage· If the NEIGHBORHOOD sustained damage, please provide

descriptive commentary & photos and discuss any impactupon neighborhood marketability/property value trends.

Post-Disaster Inspection- 1004D,Catastrophic Disaster Area PropertyInspection Report, Property ConditionReport (PCR)

For all post disaster reports/products, exterior inspection withsupporting photos are required. Photo addendums to includeFront View and Street view. Interior inspection if deemedapplicable.

collateral requirements and appraisal reporting job aid

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