Fannie
Mae, the Cost Approach and Manufactured Housing: How it Affects
You
If
you are looking to provide concrete valuations for the cost and
quality of manufactured housing, Marshall & Swift’s
time-honored Residential Cost Handbook, Residential Cost Explorer
and the desktop complement Residential Estimator 7 are perfectly
suited to this class of adjustments. Added to Residential Estimator
7 in late 2002, the manufactured housing cost feature has been
well received and is being followed by its upcoming inclusion
in the on-line cost calculator SwiftEstimator™.
Government sponsored Fannie Mae recently announced a new addendum
has been added to the necessary requirements for assessing the
value of the manufactured housing type. In an effort to enhance
the quality of manufactured home appraisals, Fannie Mae is now
requiring that a detailed and supported cost approach be added
to all manufactured housing appraisals. Now when completing the
Manufactured Home Appraisal Report Addendum (Form 1004C), appraisers
must qualify their opinions surrounding the quality and condition
of the manufactured home in question, meanwhile providing lenders
with additional information, and improving the financial institution’s
ability to underwrite.
A source of information for evaluating manufactured housing,
Fannie Mae references the Marshall & Swift product line. With
the Residential Cost Handbook, users are able to arrive at an
estimated cost for the manufactured housing when new, basing determinations
on the construction quality along with several other variables.
The Residential Cost Handbook provides an explanation of all
related terms and quality levels, allowing appraisers to justify
their observations and fulfill another stipulation of the addendum.
These descriptions within the Residential Handbook, Residential
Cost Explorer and Residential Estimator 7 enable appraisers to
easily take a qualitative approach to valuing manufactured housing
properties. Analysis such as this is essential because the condition
and quality level predicates the worth of manufactured housing.
The following procedures are involved in properly developing
a detailed cost approach and should improve the appraiser’s
ability to:
- Recognize differences in the quality of manufactured housing
constructions
- Understand differences between comparable sales and the subject
property
- Extract the market appropriate adjustments for the sales
comparison analysis
- Identify sales of manufactured homes that are similar enough
to the subject property and can be used as valid market comps.
Whatever format is chosen to report the cost approach, the information
must be sufficient to enable lenders to reproduce the cost figures
and calculations. Form 1004C includes the minimum level of detail
for the cost approach that the appraiser should provide on each
appraisal report.
Should you require more information before making your decision,
feel free to contact the Marshall & Swift Sales and Service
team at 800.544.2678. We’ll be happy to help determine the
product most suited to your needs.
Happy Cost Reporting!
Click
here to view the complete PDF document from Fannie Mae.
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