1980.334—Appraisal of property serving as collateral.
An appraisal of all property serving as security for the proposed loan will be completed and submitted to RHS for review with the request for loan guarantee. The Lender may pass the cost of the appraisal on to the borrower. The appraisal must have been completed within 6 months of the date the request for a conditional commitment is submitted to RHS.
(a) Qualified appraiser.
The Lender will use an appraiser that is properly licensed or certified, as appropriate, to make residential real estate appraisals in accordance with the criteria set forth by the Appraiser Qualification Board (AQB) of the Appraisal Foundation regardless of the amount of the loan. Appraisers may not discriminate against any person in making or performing appraisal services because of race, color, familial status, religion, sex, age, disability, or national origin.
(b) Appraisal report.
Residential appraisals will be completed using the sales comparison (market) and cost approach to market value.
(i)
The “Estimated Reproduction Cost-New of Improvements” section of the form must be completed when the dwelling is less than 1 year old.
(ii)
Not less than three comparable sales, which are not more than 12 months old, will be used unless the appraiser provides documentation that such comparables are not available in the area. Comparable sales should be located as close as possible to the subject dwelling. When the need arises to use a comparable sale that is a considerable distance from the subject, the appraiser must use his or her knowledge of the area and apply good judgment in selecting comparable sales that are the best indicators of value for the subject property.
(2) Supporting documentation.
A narrative explanation supporting unusual adjustments must be attached to the appraisal.
(3) Photographs.
The appraisal report must include photographs which clearly provide front, rear, and street scene views of the subject property, and a front view for each comparable sale used in the completion of the appraisal.
(c) RHS acceptance.
The Lender will be required to correct or complete any appraisal returned by RHS for corrective action.