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8 results for What conditions require a subject-to appraisal under FHA

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#1 HUD/FHA Single Family Handbook 4000.1 Page 1285

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III. SERVICING AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages 2. Default Servicing Handbook 4000.1 1258 Last Revised: 11/26/2025 (1) Surchargeable…

HUD/FHA Single Family Handbook 4000.1 · HUD_FHA_4000.1.pdf · Page 1285 · View at official source (HUD.gov — SFH Handbook 4000.1) →

III. SERVICING AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages 2. Default Servicing Handbook 4000.1 1258 Last Revised: 11/26/2025 (1) Surchargeable Damage (a) Definition Surchargeable Damage is damage to a Property caused by fire, flood, earthquake, tornado, hurricane, boiler explosion (for condominiums only), or Mortgagee Neglect. (b) Standard The Mortgagee is responsible for the cost of Surchargeable Damage. (c) PFS Request for Damaged Property The Mortgagee must submit a variance request for HUD approval via EVARS before approving the use of the PFS Option for a Property with Surchargeable Damage as follows: • The Mortgagee must first obtain the Government’s Estimate of the Cost to Repair the Surchargeable Damage by contacting HUD’s Mortgagee Compliance Manager (MCM). • Upon receipt of the Government’s Estimate of the Cost to Repair, the Mortgagee must submit form HUD-90041, Request for Variance: Pre- foreclosure Sale Procedure, via EVARS to obtain HUD approval prior to entering into a PFS Agreement with the Borrower. The Mortgagee must note on the variance request the specific reason for the request and attach any supporting documents needed for HUD’s review. (d) “As-Is” Subject to Surchargeable Damage If the Property is being sold “As-Is” subject to the Surchargeable Damage, the Mortgagee must deduct the Government’s Repair Cost Estimate of the damage from its PFS Claim. (e) “As Repaired” Subject to Surchargeable Damage If the Property is being sold “As Repaired” and funds for Surchargeable Damage repairs are escrowed or provided as a credit to the Borrower at closing, the Mortgagee must not include in its Net Sale Proceeds calculation the amount of the repair escrow or repair credit. (2) Damage other than Surchargeable Damage If the damage is not considered Surchargeable Damage, the Mortgagee is not required to obtain HUD approval prior to approving the PFS Agreement.

#2 VA Lenders Handbook (Pamphlet 26-7) Page 404

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Appraisal Report 11-26 18. Appraisal Conditions Change Date February 22, 2019 • This Chapter has been revised in its entirety. a. As-is The appraisal will be prepared “as-is” if:…

VA Lenders Handbook (Pamphlet 26-7) · VA-Lender-Handbook.pdf · Page 404 · View at official source (VA.gov — Appraisers/Staff Appraisal Reviewer) →

Appraisal Report 11-26 18. Appraisal Conditions Change Date February 22, 2019 • This Chapter has been revised in its entirety. a. As-is The appraisal will be prepared “as-is” if: • the appraiser finds that the property meets MPRs on origination appraisals, or • the assignment is a liquidation appraisal (see Topic 20 of this Chapter). b. Subject to Repairs The appraisal will be prepared “subject to the following repairs or alterations on the basis of a hypothetical condition that the repairs or alterations have been completed” if: • on an origination appraisal, the appraiser recommends that repairs be completed for the property to meet MPRs, • customer preference items must be completed on a new construction property, or • alterations are being made to the property. c. Subject to Completion Proposed construction properties will be appraised “subject to completion per plans and specifications.” d. Recommend Repairs, Not Inspections When an appraiser observes an item that does not meet VA MPRs, the appraiser must recommend a repair, not an inspection.

#3 UAD 3.6 / URAR (FNMA) Page 334

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Reconciliation Appendix F-1: URAR Reference Guide Page 334 of 375 Version 1.3 Example 3. Cost to Repair Reporting Method is Itemized As Is Overall Condition Rating Reconciliation:…

UAD 3.6 / URAR (FNMA) · Appendix F-1 URAR Reference Guide v1.3.pdf · Page 334 · View at official source (fanniemae.com/uad) →

Reconciliation Appendix F-1: URAR Reference Guide Page 334 of 375 Version 1.3 Example 3. Cost to Repair Reporting Method is Itemized As Is Overall Condition Rating Reconciliation: As Is Overall Condition Rating Report Field ID Report Label When to Include Allowable Answers / Format Definition / Additional Guidance 26.071 As Is Overall Condition Rating Required if New Construction is No, and Market Value Condition is Subject to Completion Per Plans or Subject to Repair C1 to C6 Provide the As Is Overall Condition Rating reflecting the property’s current condition if Market Value Condition is any of the following: • Subject to Completion Per Plans (such as an addition) • Subject to Repair Notes: • Reference Appendix 2: Condition and Quality Rating Definitions for definitions. 26.071 N/A Displays when As Is Overall Condition Rating displays N/A Existing condition of the property as of the effective date of this appraisal, excluding all required repairs, alterations, or inspections Reconciliation Exhibits All photos or images related to the Reconciliation section are displayed in the Reconciliation Exhibits subsection. If there are no photos or images, this subsection does not display. Reconciliation Exhibits Report Field ID Report Label When to Include Allowable Answers / Format Definition / Additional Guidance See iGuide Reconciliation Exhibits If applicable Photos or images Photos or images relevant to the Reconciliation section may be provided, including images supporting the Alternate Opinion of Value, which display in Reconciliation Exhibits. If the photo or image is not specifically indicated, a caption must be provided to further identify the photo or image.

#4 UAD 3.6 / URAR (FNMA) Page 325

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Reconciliation Appendix F-1: URAR Reference Guide Page 325 of 375 Version 1.3 Market Value Condition and Final Value Condition Statement Reconciliation: Market Value Condition and…

UAD 3.6 / URAR (FNMA) · Appendix F-1 URAR Reference Guide v1.3.pdf · Page 325 · View at official source (fanniemae.com/uad) →

Reconciliation Appendix F-1: URAR Reference Guide Page 325 of 375 Version 1.3 Market Value Condition and Final Value Condition Statement Reconciliation: Market Value Condition and Final Value Condition Statement Report Field ID Report Label When to Include Allowable Answers / Format Definition / Additional Guidance 26.009 Market Value Condition Always required Choose one or more allowable answers from table (Market Value Condition) • As Is • Subject to Completion Per Plans • Subject to Inspection • Subject to Repair Notes: • If Market Value Condition is As Is, no other conditions can be applied. • If Recommended Action is Completion, Inspection, or Repair in the Defect, Damages, Deficiencies subsection, the report must be made subject to the resolution of the item (Market Value Condition cannot be As Is). • If Market Value Condition is Subject to Repair, there must be at least one item in the Defect, Damages, Deficiencies subsection with Recommended Action of Repair. • If Market Value Condition is Subject to Inspection, there must be at least one item in the Defect, Damages, Deficiencies subsection with Recommended Action of Inspection. 26.013 Final Value Condition Statement Displays if Market Value Condition is not As Is N/A Variations of this sentence display based on the value condition(s) provided in Market Value Condition. Market Value Condition (Choose all that apply) Allowable Answer Definition / Additional Guidance As Is Opinion of Market Value is based on the property in its current state as of the appraisal report effective date. The appraiser has not employed any hypothetical conditions or extraordinary assumptions. Note: If this answer is selected, Final Value Condition Statement (26.013) does not display, and no other conditions can be applied. Subject to Completion Per Plans Opinion of Market Value is based on the hypothetical condition that the improvements have been completed per plans and specifications as of the appraisal report effective date. Note: If this answer is selected, the standard Subject to Completion Per Plans language displays as part of the Final Value Condition Statement (26.013). Subject to Inspection Opinion of Market Value is based on the itemized list of required inspections being completed and the extraordinary assumption that any deficiency does not require alteration or repair. Note: If this answer is selected, the standard Subject to Inspection language displays as part of the Final Value Condition Statement (26.013). Subject to Repair Opinion of Market Value is based on the hypothetical

#5 Fannie Mae Selling Guide Page 1151

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Losses, damages, penalties, settlements, liabilities, judgments, claims, counterclaims, defenses, actions, costs, expenses, attorneys' fees, and other legal fees (collectively,…

Fannie Mae Selling Guide · Selling Guide - 06-03-2026.pdf · Page 1151 · View at official source (selling-guide.fanniemae.com) →

Losses, damages, penalties, settlements, liabilities, judgments, claims, counterclaims, defenses, actions, costs, expenses, attorneys' fees, and other legal fees (collectively, “Fannie Mae losses” or “losses incurred by Fannie Mae”). Fannie Majors See multiple pool. Federal Emergency Management Agency (FEMA-Declared Disaster Areas) A city, county, or parish designated by FEMA as eligible for individual assistance as a result of a natural disaster. Federal Emergency Management Agency (FEMA) A federal agency that provides assistance in areas that have suffered a major disaster or other emergency. It also maintains flood insurance rate maps that identify the Special Flood Hazard Areas in which Fannie Mae requires flood insurance. Federal Housing Administration (FHA) FHA, also a part of HUD, provides mortgage insurance on loans made by FHA-approved lenders. Federal Housing Finance Agency (FHFA) The safety, soundness, and mission regulator for Fannie Mae. FHFA replaced the former regulator, the Office of Federal Housing Enterprise Oversight (OFHEO). fee simple estate An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condo project, the unit owner is the exclusive owner only of the air space within their portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property. FEMA Federal Emergency Management Agency FHA Federal Housing Administration FHA-insured mortgage A mortgage by the FHA; may be referred to as a "government" mortgage. FHFA Federal Housing Finance Agency FHLMC Federal Home Loan Mortgage Corporation fidelity bond

#6 Fannie Mae Selling Guide Page 780

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loans, including those mortgages that receive an Approve/Ineligible recommendation, provided the loan meets the requirements contained in this section as well as those contained…

Fannie Mae Selling Guide · Selling Guide - 06-03-2026.pdf · Page 780 · View at official source (selling-guide.fanniemae.com) →

loans, including those mortgages that receive an Approve/Ineligible recommendation, provided the loan meets the requirements contained in this section as well as those contained in A2-2-04, Limited Waiver and Enforcement Relief of Representations and Warranties. Appraisal Requirements The appraisal for the property must follow standard requirements contained in Chapter B4–1, Appraisal Guidelines. Those guidelines allow an appraisal to be based on the “as is” condition of the property provided there are no conditions that affect the safety, soundness, or structural integrity of the property. If those conditions do exist, the property must be appraised subject to completion of the specific alterations or repairs (“as repaired”) and a completion report must be obtained from the appraiser prior to delivery of the mortgage to Fannie Mae. Delivery Loans originated in accordance with this section must be delivered to Fannie Mae no later than two years from the date of the disaster declaration by FEMA. Special Feature Codes Loans delivered under these guidelines must include SFC 416 as part of the delivery data. Uniform Appraisal Dataset (UAD) 3.6 Policy Lenders using UAD 3.6 must follow the requirements in the UAD 3.6 Policy Supplement. Recent Related Announcements The table below provides references to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SEL-2025-08 October 08, 2025 Announcement SEL-2025-04 June 04, 2025

#7 HUD/FHA Single Family Handbook 4000.1 Page 1595

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IV. CLAIMS AND DISPOSITION A. Title II Claims 1. Claim Submission Process Handbook 4000.1 1568 Last Revised: 11/26/2025 IV. CLAIMS AND DISPOSITION A. TITLE II CLAIMS This section…

HUD/FHA Single Family Handbook 4000.1 · HUD_FHA_4000.1.pdf · Page 1595 · View at official source (HUD.gov — SFH Handbook 4000.1) →

IV. CLAIMS AND DISPOSITION A. Title II Claims 1. Claim Submission Process Handbook 4000.1 1568 Last Revised: 11/26/2025 IV. CLAIMS AND DISPOSITION A. TITLE II CLAIMS This section provides the standards and procedures applicable to the submission of claims for all Single Family (one- to four-units) Mortgages insured under Title II of the National Housing Act, except for Home Equity Conversion Mortgages (HECM). The Mortgagee must fully comply with all of the following standards and procedures when submitting a claim for Federal Housing Administration (FHA) mortgage insurance benefits. 1. Claim Submission Process a. Preparation and Submission of Claims (03/01/2023) i. Who Can Submit Claims The holding Mortgagee or the servicing Mortgagee must submit the claim. While authorized parties may prepare or submit the claim on behalf of the Mortgagee, HUD will only pay the claim as stated in Disbursement of Claim. ii. Liability for Claims Filed Mortgagees are liable for the contents of any claims filed. By submitting a claim, the Mortgagee certifies that the statements and information contained in the claim are true and correct. HUD will prosecute false claims and statements and Mortgagees may be subject to criminal and/or civil penalties or other action. iii. FHA Case Number The Mortgagee must ensure that the FHA case number is on all Parts of form HUD- 27011, Single Family Application for Insurance Benefits, and on the cover page of any claims correspondence and documents sent to the Mortgagee Compliance Manager (MCM) and HUD. iv. Insured Mortgages The Mortgagee may only submit a claim for a Mortgage that is insured by FHA. v. Form HUD-27011, Single Family Application for Insurance Benefits The Mortgagee must use form HUD-27011 to submit a claim for insurance benefits. Form HUD-27011 consists of the following five parts. See the Claim Filing Technical Guide for detailed information on completing this form.

#8 VA Lenders Handbook (Pamphlet 26-7) Page 352

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Appraisal Process 10-17 9. Properties Eligible for an Appraisal, continued k. Leaseholds A leasehold estate or any other property involving less than fee simple ownership is…

VA Lenders Handbook (Pamphlet 26-7) · VA-Lender-Handbook.pdf · Page 352 · View at official source (VA.gov — Appraisers/Staff Appraisal Reviewer) →

Appraisal Process 10-17 9. Properties Eligible for an Appraisal, continued k. Leaseholds A leasehold estate or any other property involving less than fee simple ownership is eligible for appraisal, but must be approved by VA before the NOV is issued. VA’s legal staff will review the leasehold documents and the RLC will notify the requester of the results of the review. Copies of the following documents must be sent to the RLC in order for the leasehold to be reviewed for acceptability: • lease identifying the property to be leased, the lessor, the lease term, and the rent, • all preceding assignments that may have occurred prior to the current assignment, • sales contract, and • in cases of age or income restricted leasehold communities, the Veteran-lessee consent statement. l. Properties in PUDs Properties located in a Planned Unit Development (PUD) are eligible for an appraisal if the lender determines that the title meets the requirements specified in Chapter 16 of this Handbook. VA does not maintain a list of accepted PUDs. m. Property to be Improved A property to be altered, improved or repaired is eligible for an appraisal with the appraisal prepared “subject to” the satisfactory completion of the work. The appraiser must be provided with construction exhibits, or depending on the nature of the work involved, documentation clearly describing the full extent of all work to be completed. The appraiser will provide an “as repaired” value. Any work that must be inspected upon completion must be approved by the local building authority. Continued on next page

Chief Appraiser Says Reading the actual guideline text below — never a general AI guess

# Subject-To Appraisal Conditions Here's what we found: The passages address when appraisals use "subject to" language, but they don't specifically define when a "subject-to appraisal" is *required* under FHA. VA tells us that appraisals are prepared "subject to repairs" when the appraiser recommends repairs for the property to meet Minimum Property Requirements on origination appraisals, or when alterations are being made. Fannie Mae's guidance shows that when a property is appraised subject to completion or subject to repairs, the appraiser must report both the "as-is" condition rating and the hypothetical value after those items are completed. The FHA handbook passages provided focus on damaged properties in pre-foreclosure sales, not standard appraisal conditions. Straight from HUD/FHA Single Family Handbook 4000.1, VA Lenders Handbook (Pamphlet 26-7), and UAD 3.6 / URAR (FNMA) — nothing added.

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