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dwmordue
390 Posts |
 Posted - 04/11/2008 : 1:03:35 PM
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Anybody had any experience doing FHA on acreage.
I've got a stickbuilt home for sale with 20 acres, but it's 3 separate tax parcels.
house is on 10 acre piece, has the only road access. There's a 6 acre piec and a 4 acre piece behind the front 10 acres, but the only access to them is through the front 10 acres.
20 acres is typical for the area, and all of the comps are on 14 - 23 acres.
House appraises for $100k more than sales price.
Does FHA have acreage restrictions, or any kinky appraisal requirements.
House and the 10 acres it's on are more than enough to cover the sales price value.
Would the seller have to just sell the house on the 10 acres and quit claim the other 2 pieces at closing, or after closing? He's pretty flexible.
Thanks for any advice.
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MisterVA
5805 Posts |
Posted - 04/11/2008 : 1:13:13 PM
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| Here is what I have done in the past. Have two P&S agreements that are contingent on each other closing. The house & land parcel will have the bulk of the sale price and will be the property mortgaged. The land parcels will end up being owned free and clear for a nominal sale price. The reason for the contingency is so if the house deal falls through, they cannot buy the land separately from the house parcel. It protects the seller. |
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dwmordue
390 Posts |
Posted - 04/11/2008 : 1:45:12 PM
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Ok, so just to be clear, Is there an acreage restriction on FHA loans??
Or will an FHA appraisal not take into consideration the other 2 parcels as part of the transaction? |
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MisterVA
5805 Posts |
Posted - 04/11/2008 : 1:50:33 PM
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| The lien should be on 1 parcel. Whether the parcel is 20 acres or 10 is immaterial. |
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Hopland
1789 Posts |
Posted - 04/11/2008 : 2:49:53 PM
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FHA does not have any size limitations but appraisers and lenders are to be careful regarding excess land (land in excess of what is required to support the primary highest and best use.) The protocol for excess land can be found in the HUD Handbook 4150.2 at section 4-4. If there is excess land which exceeds what is typical for the market and it is readily marketable the appraiser is to describe it but not include it in the value. This would require the use of a hypothetical condition and a survey of the portion not valued. In my experience (and I do a lot of FHA appraisals with acreage) is that this almost never happens.
Just stating that there are "3 tax lots" doesn't tell us much and this is where your appraiser and a title company come into play. This may be one parcel with three tax assessor numbers. Tax numbers are merely for record keeping purpses in assessing taxes
and doesn't have much to do with the highest and best use and the legal characteristics of the lot(s).
It doesn't sound like the back to "lots" are readily marketable due to access and the comps seem to indicate that the lot size of 20 acres is typical. I don't think FHA would have a problem with this property and merging them into a single tax lot would not be ncessary. The appraiser just needs to do a good job in explaining. |
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