ten year warranty and a final inspection are required for high ratio loans.
Under Construction are properties that are under construction and are not complete at the time of the appraisal. For high ratio loans, provide final inspection by a HUD approved inspector or approved local jurisdiction AND evidence of an approved ten year warranty. (NOTE: For properties under construction, three local inspections do not allow for maximum financing unless combined with an approved ten year warranty.) Under Construction status is in effect with the first placement of concrete through the point of being 100% complete.
Existing Construction (less than one year old) (new, prior occupancy has no bearing) properties that are less than one year old. If no repair or correction conditions are made by the appraiser, the appraisal serves as the final inspection as per HUD Handbook 4145.1 paragraph 6-3-A(3). A ten year warranty is required in the case binder for maximum financing.
General Requirements: 1. Appraisals/Appraisers
Lender to provide appraiser - The lender must provide the appraiser with the following documents. If not provided return the incomplete appraisal to the lender: 1) Builder’s plans, specifications and construction documents:
Plot Plan (including dwelling and accessory buildings, finish grade elevations and direction of drainage)
Floor plan (separate foundation plan and plan of each floor and basement, if any)
Kitchen cabinet details
Heat layout (ductwork and location of all vents)
Heat loss calculations
Cooling system layout
Exterior elevations (front, side and rear)
Sections (exterior wall sections, stairwells, and stairs)
Fireplace section and elevations
Roof truss details
Water supply plans and specifications
Sewage system plans and specifications
Individual water supply and sewage disposal systems, if applicable
Description of materials HUD Form 92005
2) Completed Builder’s Certification (Form HUD-92541) signed and dated no more than 30 days prior to the date the appraisal was ordered. 3) All reports and available information (i.e. sales agreement, title report, environmental reports or studies and inspection reports)
NOTE: Appraisers must receive a fully executed form HUD-92541, Builder’s Certification of Plans, Specifications, & Site, 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.
Copy Printed: REVISION I
02/16/027 Revision Effective: 05-30-00