flood zone
90) Flood Area
05/16/07
Dear Henry,
When appraising a residence that is in a flood zone, there seems to be two schools of thought on how to treat the ground level area -- which in my case was a garage and utility area that was improved with A/C, tile, sheetrock, etc.
I called zoning and code enforcement and they told me it was considered uninhabitable space due to the flood level. After submitting my assignment, the lender told me to change the GLA to include the lower level, as they had a previous appraisal showing it included.
I do my share of review appraisals and I know there are a lot of us who do not do the extra research required to complete an appraisal. Do you think I am right on this one?
BILL WJD@TAMPABAY.RR.COM
Dear Bill,
The guidelines established by Fannie Mae say that the GLA should include all habitable space in the house that is heated and finished substantially like the rest of the house and has normal ceiling heights. They also say that basement areas should be included only when the meet these standards and are 100% above ground. Fannie Mae goes on to say that these are only guidelines and you can do whatever is customary in your area if you believe it will make a credible appraisal. You also must not do anything you believe might be used in a fraudulent manner.
When the lender changes the scope of work as they have done in your situation you can comply as long as all the above conditions are met. From the sound of your question, it does not seem to me that this would be the case if you complied with their request.
H2
When appraising a residence that is in a flood zone, there seems to be two schools of thought on how to treat the ground level area -- which in my case was a garage and utility area that was improved with A/C, tile, sheetrock, etc.
I called zoning and code enforcement and they told me it was considered uninhabitable space due to the flood level. After submitting my assignment, the lender told me to change the GLA to include the lower level, as they had a previous appraisal showing it included.
I do my share of review appraisals and I know there are a lot of us who do not do the extra research required to complete an appraisal. Do you think I am right on this one?
BILL WJD@TAMPABAY.RR.COM
Dear Bill,
The guidelines established by Fannie Mae say that the GLA should include all habitable space in the house that is heated and finished substantially like the rest of the house and has normal ceiling heights. They also say that basement areas should be included only when the meet these standards and are 100% above ground. Fannie Mae goes on to say that these are only guidelines and you can do whatever is customary in your area if you believe it will make a credible appraisal. You also must not do anything you believe might be used in a fraudulent manner.
When the lender changes the scope of work as they have done in your situation you can comply as long as all the above conditions are met. From the sound of your question, it does not seem to me that this would be the case if you complied with their request.
H2