In the Wake of Hurricanes Harvey & Irma, Dart Appraisal Offers Insights on Inspections in Disaster Areas
From Michael Dresden, President at Dart Appraisal
Inspections in Disaster Areas. So many of our fellow citizens across the country are dealing with devastation wrought by natural disasters. First and foremost, we want all of our clients, brokers and appraisers to know that we are here to support you and your borrowers in any way that we can. Dart has always believed that at the end of the day, every business relationship and every transaction comes down to people. The destruction left behind by these events is hard to comprehend, and all of us here at Dart send our thoughts and prayers for recovery to those impacted by these events.
When it comes to inspecting properties that have been affected by natural disasters, the Disaster Area Inspection Report (DAIR) is the most commonly used product. Some lenders require a 1004D as opposed to a DAIR, so it is best to first check with your institution/investor before placing an order. When performing a DAIR inspection, the appraiser will observe the exterior features of a property and surrounding neighborhood. The report will include exterior photos, and will include a statement indicating whether or not the property sustained damage from the disaster.
If the property did sustain damage, typically an additional report would be ordered which includes an interior inspection of the property. This report, the Catastrophic Disaster Area Inspection Report (CDAIR) provides an assessment of any impact to the value and marketability of the subject's neighborhood as a result of a natural disaster, as well as a complete set of exterior and interior photos of the subject. Photos of any damage to the subject will also be included along with comments on the severity of the damage. With both the DAIR and CDAIR, the appraiser does not provide an estimate on the effect on value of any damage nor an estimated "Cost to Cure" any damage. No opinion of value is provided.
Just yesterday, FHA issued a waiver on its requirement that inspections required in disaster areas not be completed until after FEMA issues a close date for the Incident Period. Inspections on single-family properties in the Hurricane Irma Presidentially Declared Major Disaster Area in Florida will be permitted beginning yesterday, September 19. Read FHA's full announcement here. The Mortgage Bankers Association, which had asked HUD Secretary Ben Carson to consider changing the Incident Close Date inspection requirement last week, says it will continue to work with HUD to secure a long-term resolution for this issue.
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