HUD HOC Reference Guide
Construction & New Homes: General Requirements
Appraisal & Property Requirements
A. Introduction | B. Construction definitions | C. General requirements | D. Minimum property standards
E. Subdivision approvals | F. Final inspection on properties
C. General Requirements
1. Appraisals/Appraisers: The appraiser is required to obtain and retain a copy of the builder�s plans and specification or other document sufficient to identify the extent and character of the proposed improvements (Pursuant to USPAP Standards Rule 1-2). The appraiser may obtain a copy of these documents from the builder or the Lender.
The appraiser must receive/obtain:
A Completed Builder�s Certification (Form HUD-92541) signed and dated no more than 30 days prior to the date the appraisal was ordered before performing the appraisal on proposed, under construction or less than one year old properties. Appraisers must review Item 1 on the form and note in the Appraisal Report any discrepancies between the information in Item 1 and the actual conditions observed on site. The lender is responsible to address any yes answer in Item 1.
2. Lender Required Documents: for proposed, under construction and existing less than one year old properties. Please see: HUD Handbook 4145.1 Appendix 11 and HUD Mortgagee Letters 1995-11, 2001-27, 2005-09 and 2006-33.
All reports and available information (i.e. sales agreement, title report, environmental and soils reports or studies and inspection reports).
In those cases involving new construction, that is 90% or more complete, including existing less than one year old, the appraiser does not need the plans and specs to perform an appraisal.
Complete appraisal package includes:
- Form HUD-92544, One Year Builder�s Warranty
- Form HUD-92541, Builder�s Certification
- Termite forms of the National Pest Control Association, HUD-NPMA-99-A and HUD-NPMA-99-B (where applicable) Please see: HUD Mortgagee Letter 1999-03, 2001-04 and 2003-11.
- Early Start Letter or ten-year warranty, or building permit and certificate of occupancy (or equivalent) as applicable.
- Applicable inspections and/or certifications (Engineer Certification on Manufactured Home foundation).
- Any other additional/appropriate submissions required in satisfying FHA requirements which may include, but not limited to the FHA Data Sheet 79G; a LOMA/LOMR or elevation certificate (Refer to HUD Mortgagee Letter 1999-34) regarding flood plains, well water tests, local health authority approval for individual water and sewer systems, etc.
Note: Unless otherwise indicated, above listed items are to be included in the endorsement case binder. Also, Mortgagee Letter 1999-34 IS NOT applicable for condominium projects in any capacity.