FHA Forward & Reverse Mortgages
FHA appraisers, you may begin seeing more appraisal assignments for both FHA ‘Forward’ and ‘Reverse’ mortgages on condos, starting in October 2019. “Forward” is the slang term for a standard mortgage with a set term, paid off during that term.
HUD/FHA has changed the eligibility requirements for condo properties to allow senior (seasoned) citizens to apply for a reverse mortgage if that is their primary residence. The change takes effect in October.
The change also affects standard ‘forward’ mortgages on condos, making it easier for condo projects to quality for FHA guaranteed mortgages. FHA clamped down on these in 2008, but has decided to relax the overly burdensome condo qualification requirements.
You can read the details here or below.
Here’s an interesting article describing how community zoning ordinances began and are applied in the US.
In our residential reports, we appraisers are required to state the ‘Specific Zoning Classification’ in which the property is located, and to provide a ‘Description’ of that zone. These days, it’s fairly easy to find that info because many jurisdictions have zoning maps and the zoning ordinances available on their web site. Take the time to actually research the details.
If you can’t get zoning info by a web site, obtain a printed map from the county, parish, or community jurisdiction.
The last appraisal done on my home in 2013 had zoning info provided by the appraiser THAT DID NOT EXIST! Where the appraiser came up with the zone ‘classification’ and it’s description remains a mystery! Don’t make stuff up!
Solar PV (Photovoltaic) systems are becoming more common on Residential properties, and even on Commercial buildings. Here is an article written by Sandra Adomatis, SRA, a Florida appraiser who has become a recognized expert about solar applications.
The article is a good resource to help you understand the characteristics and valuation issues of solar. You can get more info from Sandra’s website, and from the other links/documents she mentions.
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Appraisers, please STOP using ridiculous loan officer jargon!
A ‘forward mortgage’ is simply called a mortgage. It requires no dictionary of Institutionalized Ignorance.
This is how ‘desk appraisals based on field inspection by unlicensed incompetents came to be referred to as ‘bifurcated hybrid appraisals. Use of alternative euphemisms is a first step in trying to make garbage products appear legitimate.
As for relaxed condo requirements by FHA, if it helps borrowers, great. A standard used long ago was that if a project had stood for over a year, then it was eligible even if it wasn’t originally built to SHA/HUD pre approval specs.
Many of these compartmentalized actions only make sense in a box. Looking at the bigger picture, one begins to understand the goals of originators have moved so far away from consumer protection, caring about anyone or anything other than their own companies bottom line is an afterthought.
If consumers want to absolutely protect themselves in the lending environment, they’ll simply need to adapt to requesting fewer loans, and shorten the terms if they are able.