HUD 232 Appraisal Requirements
All HUD 232 applications require appraisals. These reports provide lenders and the Office of Residential Care Facilities (ORCF) with a simple Market Value of the Total Assets of the Business (MVTAB) for a property. In addition, all appraisal reports must include market studies. Previously, market studies were submitted as separate reports, HUD now encourages single reports covering both the appraisal and market study. Reports from qualified appraisers must meet the following criteria:
Must be USPAP (Uniform Standards of Professional Appraisal Practice) compliant and must contain the appraiser’s (or appraisers’) resume and a copy (or copies) of appraisal license(s) or temporary permit(s).
For existing facilities - Adequate photo documentation of the facility or property must give a desk reviewer a good sense of condition, quality, and adequacy of the physical plant.
For new construction or substantial rehabilitation - Adequate photo documentation of the site and other exhibits (floor plans, site plans, elevations, etc.) must be included. Exhibits must give a reviewed a good sense of the project plan.
All submitted exhibits must be clear and readable.
Plans and elevations can be incorporated into the report by reference alone. However, the cited plans must be supplied alongside the appraisal report.
The effective date of the appraisal must be the actual date of inspection.
For new construction and substantial rehabilitation projects, the appraisal report must be submitted within 120 days of the effective date. For the HUD 232/223(f) program, appraisal reports must be submitted within 180 days of the effective date.
Appraisal reports should also include the following - Regional Description, Neighborhood Description, Site Description, Zoning and Conformance, Improvement Description, Remaining Economic Life of Improvements, On-Site Services, and Highest and Best Use.
Read Section II, Chapter 5 Appraisal Reports and Market Studies in the HUD 232 Program Handbook for a more detailed discussion of appraisals, report requirements, and market analysis.