FEMA Appraisal Archives

FEMA 50% Rule 2022

The FEMA 50% rule 2022 requirements involving appraisals have changed significantly. Communities participating in the National Flood Insurance Program (NFIP) have added responsibilities. Properties within the flood hazard zones must comply with stringent requirements as it pertains to permits. The local municipality, under the guidance of the Flood Plain Administrator are responsible for upholding the NFIP/FEMA requirements.

Structures that adhere to the current NFIP/FEMA codes are not at liberty to comply with additional requirements. Conversely, structures that don’t adhere to the current NFIP/FEMA codes are at liberty to comply with additional requirements. Consequently. elevation would be the preferred solution under FEMA.

Demolition and removal of the structures may not be financially feasible to the owner. As a compromise, the NFIP adopted the 50% rule. This allows for the continued use of nonconforming buildings. The 50% rule limits the allowable improvements at any given time, thereby reducing the risk to the NFIP.

The permitting department of the local municipality can inform the person applying for permits the dollar limit of the improvements. Often, the county appraiser site will post the allowable amount as it corresponds to the property address. Should this amount be insufficient or otherwise seem incorrect the property owner has the option to obtain an independent appraisal. Certainly, obtain the report from a State Certified Appraiser with sufficient knowledge and experience in this particular type of appraising. The reports developed for this specific purpose are significantly different than those developed for lending purposes. Despite years of experience, it is imperative that the appraiser is familiar with the new requirements. For further information on the FEMA 50% rule 2022 contact Shari Peterman at 727-505-6706.

Real Estate Appraisal – home appraisal – appraiser – real estate appraiser – residential appraisals – New Port Richey, FL – Priority Appraisal and Mortgage Services, Inc. (appraiserxsites.com) https:/www.facebook.com/priorityappraisaltampabay

Appraising FEMA 50% Rule

Homeowners wishing to renovate, improve, update or otherwise upgrade their dwelling in Florida flood prone areas have an extra hurdle to cross. Federal Emergency Management Agency (FEMA) has guidelines that are administered by local jurisdictions. Construction that is not to current codes require additional actions. Renovations such as a kitchen, a second story or any significant improvement have requirements. The FEMA 50% rule governs how much money is allowed on improvements. When a General Contractor is used to handle the construction, the homeowner will retain an Appraiser to develop an appraisal specifically for administrative review. The General Contractor will present the appraisal to the local jurisdiction, so they can secure the appropriate permits.

What qualifies as eligible for the 50% rule? The appraisal will breakdown the replacement cost new of the dwelling. Depreciation is then subtracted from that figure. Fifty percent of that figure is what is typically allowable for improvements or renovations.

The following is no longer applicable as of 2022

In a nutshell it sounds simple but consider this…A recent sale in your neighborhood that is comparable to your home sold for $300,000. This sale, along with at minimum two more will be compared to your replacement cost estimate and they need to be similar. This is where the limitations typically begin.

Let’s say the land value is $100,000 (it’s a waterfront lot) and the depreciation is $100,000 (the structure is older). There are lot improvements $20.000(landscaping, lighting, utility connections) and a detached shed and deck $10,000. The eligible amount to consider based on these numbers equals $70,000. Fifty percent of $70,000 is $35,000.

The scenario is oversimplified and the cost approach to value is considered primarily. Calculating depreciation can be subjective and the numbers may look favorable. The snag in the process can often be the support of the sales comparison approach to value. At minimum the local jurisdiction will be looking for an equal land value to that assessed by the County Appraiser’s office. The evaluator will likely have a construction background, usually a licensed contractor and will be familiar with building costs and cost resources.

The process can be trying to say the least. It is important to hire an Appraiser who specializes in this type of appraisal. The appraisal you received for securing a loan is unlikely to suffice for FEMA. In the end you may need to structure the renovations in stages to take full advantage of the acceptable allotment.

FEMA Appraisals

Federal Emergency Management

FEMA Appraisals are ordered by homeowners who desire to increase the size of their living area have a bit of a challenge when the property is located in a FEMA flood hazard area. In a nutshell, FEMA guidelines only allow you to increase your structure by 50% of the present value. Sounds simple enough but like everything, it’s not that simple. There are many significant components of your property that are not included in the value eligible to be increased by 50%.

Many situations call for a State Certified Appraiser to complete an appraisal on your property to prove the present market value in order to calculate the amount of increase in value allowable under FEMA guidelines. It is imperative that consumers hire an appraiser with expertise in this area. These reports call for the cost approach to value (based on the cost to rebuild less depreciation) that coincides with the sales comparison approach to value (based on recent sales in the market area). If this is not accomplished or if improvements are included in the wrong area, your renovation plans could be turned down by your local municipality.

It is imperative to ask your perspective appraiser if he/she has experience in this area. It is also advisable to retain an appraiser with a designation such as IFA, SRA etc. to insure that he/she has additional education in the appraisal field. Look for additional blog posts that will further explain the FEMA rules in greater detail. Further information can also be found at FEMA.gov. and your local County Appraisers office website.

Priority Appraisal and Mortgage Services Inc. is a residential appraisal firm experience in all areas of residential appraising in the Tampa Bay area. Focused in the Pasco, Pinellas and Hillsborough counties for the past 14 years. At Priority Appraisal and Mortgage Services, Inc. our customers are out priority. We provide fast accurate appraisals in a timely manner. We go above and beyond to fulfill your needs with any and all additional market information to serve your requirements. For more appraisal info visit: http://PriorityAppraisalandMortgageServicesInc.appraiserxsites.com or call Shari Peterman directly at 727-505-6706. I look forward to hearing from you.