Paragraph 5.17 Ordering Appraisals
If appropriate, the Field Office will also prepare a list of detailed repairs with estimated costs,
or provide copies of bids from the applicant’s contractor needed to ensure the property meets the
Agency’s regulations and guidance. This list of repairs, which is based upon the inspection reports
prepared by State-licensed inspectors or qualified, third party inspectors hired by the applicant (refer
to Paragraph 5.7 A.), will be provided to the appraiser for the purpose of obtaining a subject to
repairs/alterations value provided those repairs/alterations typically add value and are not routine
maintenance items (e.g. check smoke detectors, pest or septic inspection, add GFCI protection to
exterior, kitchen, or bathroom electrical outlets, etc.).
C.
Required Information
When the Loan Originator or Staff Appraiser requests an appraisal through the PMO’s
Procurement Requests SharePoint site using the current SFH Appraisal Request form (which can
be found in the Direct Training Hub in SharePoint along with other appraisal training materials),
the following information will be uploaded (as applicable): Cost Breakdown, Legal
Description/Deed, Plan & Specs (New Construction), Plat of Property, Prior Appraisal (1004D
only), Property Inspection Report, Proposed Repairs – Est. Cost $, Purchase Agreement &
Amendments, and Survey (if available).
The applicant has until the expiration of their Certificate of Eligibility, as described in
Paragraph 4.25, to present this information to the Loan Originator. Originals of this information
should be kept in the case file, with copies provided to the appraiser.
D.
Appraisal Disputes
In situations where the market value of the security is inadequate to support the loan
request, the Loan Originator will send Handbook Letter 17 (3550), Adverse Decision Involving an
Appraisal. Handbook Letter 17 informs the applicant of their right to request a meeting with the
Local Office to review the appraisal report and present new, objective information or evidence for
the Agency’s consideration. The Loan Approval Official will then request a technical review by an
RD staff appraiser, and must attach the additional data provided by the applicant. New information
or evidence may include, but is not limited to, incorrect number of bedrooms, bathrooms, garage
bays, finished percentage of basement, repaired or renovated conditions not captured in the report,
etc. However, consideration of additional (or alternate) comparable sales are not part of the
Agency’s technical appraisal review process.
If the RD staff appraiser’s technical review concurs with the original appraisal, or if after
revisions are coordinated and the market value still does not support the loan amount, then
the Loan Originator will send the applicant Handbook Letter 18 (3550), Unfavorable
Decision after Technical Review of an Appraisal, with appeal rights (Attachment 1-B). The
appeal will consider the Agency’s underwriting decision regarding inadequate security
(market value) to support the loan request. Once an appraisal has been accepted by the
Agency the market value reported within the appraisal is not appealable.
5-30