203k appraisals

[Mike Young]

The 203k original guideline calls for two appraisals, an 'as is' appraisal and an 'after improved' value appraisal. In 1995 a change was made that saved the borrower money by doing an 'after improved' value appraisal and a single paragraph discussing the 'as is' value. that paragraph might look something like this... The value of the subject property is $250,000 subject to the completion of the attached 'scope of work" or "bid specifications of repair". The cost of the repairs is $50,000 therefore the 'as is' value of this property for the purposes of the 203k reporting is $250,000 less the cost of repairs of $50,000 or $200,000. This $200,000 figure is used to fill in the Maximum Mortgage Worksheet.