Individual Structures

The basic question to be answered by property appraisals is if the Borrower fails to repay the Mortgage Loan, can the Seller, in the future, sell the structure for a price equal to the amount of the unpaid Mortgage Loan. In evaluating individual structures the appraiser shall take into consideration the following: (1) One of the major purposes of MHMFA is to stimulate rehabilitation and improvement of older urban housing. Therefore, Sellers are encouraged to include amounts in the Mortgage Loans for needed repairs (MHMFA will purchase Loan Participations in Mortgage Loans before these repairs are complete if required Primary and/or Mortgage Pool Insurance is obtained and if the Seller escrows amounts sufficient to complete the repairs.) If applicable, the appraiser should provide supplementary appraisal information including a list and estimates of needed repair work. (2) Estimates concerning remaining economic life of the property should be based on physical and structural considerations not neighborhood or environmental factors. (3) Older well-maintained or rehabilitated structures may have an economic life equal to new construction. (4) Since older urban neighborhoods contain most of the Commonwealth's two to four unit structures, underwriting standards different than those used for single family units tend to increase the difficulty in obtaining financing in these areas. Since all MHMFA Loan Participations in Mortgage Loans will be for structures that are owner-occupied the same appraisal standards and restrictions will apply to all 1 to 4 unit structures. The only exception will be to consider a reasonable portion of rentalincome on multi-unit structures in determining the mortgage amount an applicant can afford.