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MANUFACTURED HOUSING

FOUNDATION REQUIREMENTS

500. GENERAL. This section outlines general material and quality standards for all foundations in this manual.

501-1. FOOTING DEPTH. Excavation for footings or foundation walls shall extend below depth of soil subjected to seasonal or character-istic volume change to undisturbed soil that provides adequate bearing. Select the greatest depth required by any of the provisions below, reference Figure 5-1.

A. Maximum Frost Penetration Depth. The bottom of footings shall extend at least to the depth indicated on the map on page H-4.

B. Alternate Seasonal Wetting and Drying. This is especially important with ex-pansive soils. If expansive soils exist, consult a geotechnical engineer to obtain required foot-ing depth.

C. Footing Depth. The footings shall be deep enough to provide required uplift capac-ity. (This value may need to be determined for high wind areas after the calculations needed to determine footing bearing have been com-pleted.)

502. FOUNDATION MATERIALS. Footings and foundations shall be constructed of solid materials such as masonry, concrete, or treated wood, based on the Foundation Design Concept Selection (Appendix A) and Founda-tion Capacity Tables. (Appendix C) (For ma-sonry and concrete refer to CABO R-302.2, R-304.1 and R-304.3; for wood refer to CABO R-302.1 and R-304.5.)

503-1. FOUNDATION REQUIREMENTS. All exterior walls, marriage walls, marriage wall posts, columns and piers, must be sup-ported on an acceptable foundation system that must be of sufficient design to support safely the loads imposed, as determined from the character of the soil.

A. Height Above Grade. Foundation walls shall extend at least 8" above the finished grade adjacent to the foundation at all points. See Figure 5-1.

B. Minimum Foundation Wall and Wall Footing Thickness. For masonry or concrete construction, the minimum foundation wall will be 6 inches. The minimum reinforced concrete footing thickness will be 6 inches or 1-1/2 times the length of the footing projection from the foundation wall, whichever is greater.

503-2. PIER AND COLUMN FOOTING REQUIREMENTS. Footings for pier founda-tions shall be reinforced concrete and should be placed level on firm undisturbed soil of ade-quate bearing capacity and below the frost penetration depth. They can also be placed on engineered, compacted fill, approved by a li-censed geotechnical engineer.

A. Unusual Conditions. Where unusual conditions exist, the spacing of piers and pier size and the load bearing capacity of the soil shall be determined specifically for such condi-tions. 

B. Minimum Pier and Pier Footing Thickness. The minimum thickness for a pier is 8 inches. The minimum thickness for pier footings is 8 inches or 1-1/2 times the length of the footing projection from the pier, whichever is greater.

503-3. FOOTING REINFORCING (HORIZONTAL). Reinforce footings when the projection on each side of the wall, pier, or column exceeds 2/3 of the footing thickness, or when required because of soil conditions.

503-4. MASONRY PIERS AND WALLS. All masonry piers and walls shall have mor-tared bed and head joints. Reinforcing and grouting shall be in accordance with the foun-dation concept selected from Appendix A and designed in Appendix C.

503-5. CRAWL SPACE REQUIRE-MENTS (Basementless spaces) 

A. Height Requirement. Ground level must be at least 18 inches below bottom of wood floor joists and 12 inches below bottom of chassis beam. Where it is necessary to pro-vide access for maintenance and repair of me-chanical equipment located in the under floor space, the ground level in the affected area shall not be less than 2 feet below wood floor joists. (Refer to CABO, Section R-309.) 

B. Interior vs. Exterior Ground Level. The interior ground level must be above the outside finish grade unless:

C. Openings. Locations of crawl space openings and ventilation openings should be on long foundation walls. Avoid any openings on short foundation walls. Sill plates or other structural members should not be randomly cut to accommodate openings. Continuity of struc-tural members must be maintained.

503-6. FOUNDATION WALLS FOR BASEMENTS. The design and reinforcing of basement walls is NOT in the scope of this document. Refer to local codes and ordinances for guidance. Refer also to CABO, Section R-304: "Foundation Walls." Design the unit’s foundation based on soil conditions present at the site.

503-7. BACK FILL. Material used for back fill must be clean and free of wood scraps or other deleterious substances and must be placed carefully against walls.

503-8. STEEL BEAMS AND COLUMNS. The analysis and design of steel transverse girders, steel longitudinal girders potentially used under marriage walls to reduce the num-ber of steel pipe columns within a basement, and the steel pipe columns themselves are NOT within the scope of this document for system Types E5, E6 and E7.

	Water Heaters
	Chapter 1 Appraisal & Property Requirements Page 1-27 Requirements: 1. All water heaters must have a non-adjustable temperature and pressure-relief valve. 2. The water heater must comply with local building codes regardless of its location. 3. Rental water heaters are not acceptable.

From what we have gathered, each municipality has different code requirements. However, it seems the City of San Antonio code paraphrased below is consistent with most Texas community codes: 

"Gas utilization equipment in residential garages and in adjacent spaces that are open to the garage and are not part of the living space of a dwelling unit shall be installed so that all burners and burner-ignition devises are located not less than 18 inches (450 mm) above the floor unless listed as flammable vapor ignition resistant."

For all FHA Appraisals, Hendricks Appraisal Services will require all gas water heaters not within the living area to be raised at least 18" from the floor with proper ventilation through the roof and door vent (if applicable).

May 5, 2010

If the appraiser observes defective paint in a home that was built before 1978, in the physical deficiencies or adverse conditions section of the appraisal report, the appraiser must enter an "X" in the "Yes" box, and note all areas affected. However, if the appraiser does not observe defective paint in a home that was built before 1978, an explanation is not required in the physical deficiencies or adverse conditions section of the appraisal report.

April 20, 2010

Note: Mortgagees are required to input the appraiser’s information, as well as the relevant appraisal information, into FHA Connection prior to loan closing.

The effective date of the appraisal cannot be before the case number assignment date unless the lender certifies, via the certification field in the Appraiser Logging Screen in FHA Connection, the appraisal was ordered for conventional lending, HUD REO or government guaranteed loan purposes but was performed by a FHA Roster Appraiser and is being converted to a FHA-insured mortgage. The mortgagee must retain documentation in the case binder substantiating conversion of the mortgage to FHA.

Who is responsible for turning on utilities of REO/Bank Owned properties for FHA loans? Since there is no occupant, utility companies are hesitant to turn utilities on. Therefore, in some cases no one is responsible.

Does HUD require the utilities to be on for REO/Bank Owned properties? HUD understands that there are instances when properties are winterized and/or bank owned which will make it near impossible to have utilities turned on. In such cases the underwriter is responsible for clearing these conditions.

Is the appraiser required to inspect utility components for REO/Bank Owned properties? Absolutely, just as the appraiser would for any other standard FHA appraisal inspection.

Is the appraisal subject to utility inspection for REO/Bank Owned properties? Absolutely, just as the appraiser would for any other standard FHA appraisal inspection.

Is there anything the lender/underwriter can do? According to Mortgagee Letter 00-27, yes the underwriter is responsible for clearing these conditions.

Please read the email string below for clarification:

From: Douglas E. Hendricks [mailto:dhendricks@hendricksappraisal.com] Sent: Thursday, April 22, 2010 11:15 AM

To: HUD

Subject: Utilities for REO properties

Hello, I am aware that the utilities for REO or bank owned properties has been addressed in a previous mortgagee letter. However, I cannot recall which one specifically. Regardless, I am running into the same issue quite often and would appreciate your clarification or confirmation. I have had lenders/underwriters demand and require me to go back to the property in order to complete the utility inspection and when I get there the utilities are still turned off. A few days later I am told to go back out again and end up with the same results. Again, this is specific to REO properties. From what I understand, the appraiser is always required to perform all standard FHA inspections regardless of the owner or if vacant. All inspection results are to be disclosed in the appraisal report. However, if the property is a REO/Bank Owned property and the dwelling has been winterized or utilities are not on then the appraiser is to request a copy of the Home Inspection if available and rely on it to address utility items. If the home inspection is to available or not produced within a reasonable time, then the appraiser is to address and explain the steps taken in the report. At which point the lender/underwriter may override due to the fact that it is a REO property and there will be no one responsible for connecting the utilities. Will you please shed some light on this for me? In addition to how I can address with the lender and point them in the right direction for clarity and confirmation as well.

Respectfully,

 Douglas E. Hendricks

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Response from HUD:

Mr. Hendricks,

Mortgagee Letter 00-27 pertains specifically to HUD REO properties. Pursuant to Handbook 4150.2, Valuation Protocol Appendix D, the appraiser is required to check all mechanical, plumbing, and electrical systems in the subject property.

For REO properties that have been winterized, the appraiser cannot rely on a Home Inspection; therefore, the appraisal should be completed subject to verification or inspection the systems are in functioning condition. The underwriter will be responsible to clear the condition. For future questions, please submit via info@fhaoutreach.com. 

Sincerely,

Department of HUD Denver Homeownership Center

Technical Support Branch

We had an underwriter require us to make a list to sales price ratio adjustment to our Comparable Listings stating that all listing require a list/SP ratio adjustment or they will not close the loan. However, as indicated by the 1004MC it appears the ratio is over 100% therefore not warranting an adjustment for the listings. Everyone needs to keep in mind that any time delays will only frustrate my client and influence them to not do business with me since most other appraiser will just submit to their demands.

Respectfully,

From: HUD
Sent: Thursday, April 15, 2010 12:54 PM
To: 'Douglas E. Hendricks'

Mr. Hendricks,

In response to our discussion regarding application of adjustments for list to sale price discounts for active listings and/or pending sales, please review the following:

FHA does not have a policy regarding “mandatory” application of list to sale price discounts for active listings and pending sales for all appraisals; however, pursuant to Mortgagee Letter 05-02 and your signed appraisal certification, the appraiser is required to make market-based adjustments to the comparable sales.

If the property is located in a declining market based on the results of the 1004MC, the appraiser is required to provide a minimum of two active listings and/or pending sales. Active listings should be adjusted to reflect the list to sale price ratio. In reconciliation, if the adjusted sale price of the comparable sales is higher than the adjusted price of the active/pending sales, the appraiser must determine if a market condition adjustment is warranted.

For your reference, I have attached the mortgagee letters with additional explanation.

Sincerely,

HUD

Denver Homeownership Center

Technical Support Branch

According to: The Dictionary of Real Estate Appraisal; Appraisal Institute

Definition of Bracketing: A process in which an appraiser determines a probable range of values for a property by applying qualitative techniques of comparative analysis. The array of comparables are divided into two groups-those superior to the subject and those inferior to the subject. The adjusted sales prices reflected by these two groups limit the probable range of values for the subject and identify a bracket in which the final value estimate will fall.

Have you ever been told by a lender, investor, underwriter, processor or reviewer of a mortgage loan transaction that FHA requires the subject's purchase price to be bracketed by the comparable sales utilized in the appraisal report or the loan will not close? How about bracketing the square footage?

And if the client give you enough time to confirm with HUD, does HUD always seem to give conflicting answers? Don't forget this question, but don't answer it until you have read down further.

Well, we finally got to the bottom of it for you. According to USPAP the purchase price should never play a role in analysis and conclusion of an appraisal report, which is exactly what the client is attempting you to do when mandating bracketing. Never overlook a perfectly good comparable just to satisfy bracketing desires of the client, doing so may cause you not to be in compliance with USPAP.

Bracketing as defined above is a common methodology utilized by appraisers, however, it should not and is not mandatory. The definition describes the two groups to be superior and inferior to the subject. Do not mistake this to mean a higher sales price and a lower sales price, this would get you into trouble. As most of you are aware, there will be occasions when bracketing is simply not possible without misleading the intended user. In these cases, HUD simply asks for an explanation as to why bracketing was not utilized.

Please feel free to read and/or refer to the email string below concerning this topic should you find yourself in a similar predicament.

In selecting comparables, use the bracketing method. Bracketing, as defined in The Dictionary of Real Estate Appraisal, Fourth Edition, Appraisal Institute, is “a process in which the an appraiser determines a probable range of values for a property by applying qualitative techniques of comparative analysis to a group of comparable sales. The array of comparable sales may be divided into two groups – those superior to the subject and those inferior to the subject. The adjusted sales prices reflected by these two groups limit the probable range of value for the subject and identify a bracket in which the final value opinion will fall.” It is advisable to bracket sales using both dwelling size and sales price whenever possible. If bracketing is not possible, the appraiser should explain why. “

Remember the question above? Now is a good time to give your answer.

I have a question/concern about bracketing that just came up 5 minutes after our call. Bracketing the sales price has never set well with me per USPAP appraisers are not suppose to base opinions or comparable selections on the subject’s sales price. Who do I refer her to? Everyone needs to keep in mind that any time delays will only frustrate my client and influence them to not do business with me since most other appraiser will just submit to their demands. 

Believe it or not, we have had several clients who are not familiar with the Gramm-Leach-Bliley Act. There are still concerns of the appraiser/appraisal report disseminating confidential material. We do not have interest in sharing such information nor is it legal. Below is the USPAP definition of confidential information:

CONFIDENTIAL INFORMATION: information that is either:

? identified by the client as confidential when providing it to an appraiser and that is not available from any other source; or

? classified as confidential or private by applicable law or regulation*.

*NOTICE: For example, pursuant to the passage of the Gramm-Leach-Bliley Act in November 1999, some public agencies have adopted privacy regulations that affect appraisers. As a result, the Federal Trade Commission issued a rule focused on the protection of “non-public personal information” provided by consumers to those involved in financial activities “found to be closely related to banking or usual in connection with the transaction of banking.” These activities have been deemed to include “appraising real or personal property.” (Quotations are from the Federal Trade Commission, Privacy of Consumer Financial Information; Final Rule, 16 CFR Part 313.)

We hope this clears up any confidential concerns. Hendricks Appraisal Services is always ready and willing to help in whatever way possible. Please do not hesitate to call us at 210.946.6868.