Tag: fema

ACV Permitting Appraisals

Actual Cash Value Appraisals

Actual Cash Value Appraisals: Federal Emergency Management Agency (FEMA) have new requirements. Participation in the National Flood Insurance Program (NFIP) requires additional responsibilities. Properties within the flood hazard zones must comply with requirements as it applies to structures. The Flood Plain Administrator and local offices are responsible for application of the NFIP/FEMA requirements.

Know Your Flood Zone

Know Your Zone ttps://www.FEMA/maps.

Structures that adhere to the current codes do not need to comply with additional requirements such as an actual cash value appraisal. Therefore, elevation by either construction or land build up may adhere to current requirements. In this case only the typical building codes impact the permitting process. Conversely, structures that do not adhere to NFIP/FEMA codes require additional efforts.

FEMA would prefer removal of non-conforming improvements. Demolition and removal of the structures can be costly to the owner. As a compromise, the NFIP adopted the 50% rule. This allows for the continued use of older buildings. The 50% rule limits the actual cost of construction at any given time, thereby reducing the risk to the NFIP.

Upon application the permit department can inform the applicant of the dollar limit of the new improvements. In some counties, the FEMA letter is on the county appraiser site as it relates to the property address. For instance, should this amount be less than needed, the property owner has the option to explore actual cash value appraisals.

Most importantly, have the report completed by a State Certified Appraiser with experience in preparing actual cash value reports for FEMA compliance. The reports developed for this specific purpose are vastly different than those developed for lending or insurance. Despite years of experience, it is imperative that the appraiser is familiar with the new requirements. For further information on actual cash value appraisals for the FEMA 50% rule contact Shari Peterman at 727-505-6706 for more info visit https://www.fema.gov

Appraising Flood Plains

Appraising flood plains or FEMA designated flood areas can be a bit challenging.  In the wake of the many storms that produced “rising water” of various types, consumers have come to realize the significant damage that a storm can cause. Tropical storms and hurricanes can cause water to rise in the form of tidal surges, rainfall, waterways and other tributaries that are overcome with a surplus of water. These situations can lead to significant damage and associated costs to restore property to it’s desired condition. The risk of these circumstances is particularly of concern in certain flood zones and therefore there is likely an effect on value. Not to mention the increased cost of insurance in these areas which is also likely to effect value.

Establish the Flood Zone

One part of the lending procedure is to establish the flood zone of the property. Many times the elevation is also necessary in order to adjust and in some cases reduce the cost of flood insurance. The reduction in the cost of flood insurance often occurs when a structure is located in a flood hazard area but is elevated thereby reducing or eliminating the need for flood insurance. The flood zone is provided in the appraisal and additional flood documents are ordered through the lender. In certain conditions a survey may be necessary. The governmental organization FEMA is responsible for issuing and maintaining flood maps. These maps are available through the FEMA website.

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Appraising in Flood Plains

 

The appraiser is responsible for reporting the flood zone of the subject property and analyzing what impact the flood zone may have on value. In some situations consumers will not want incur the additional costs associated with properties located in a flood zone. This is particularly true when the property isn’t located on the waterfront but is subject to the necessity of a flood insurance policy based solely on the close proximity of the water the subject in fact enjoys no access to. In this scenario it is possible that the consumer can purchase and alternative property that is outside of the flood zone or elevated thereby reducing the flood insurance premiums to a preferred rate that is not required by the lender. Some consumers will pay more for a property outside of a flood hazard zone due to the reduced cost of insuring the property.

For more information:  http://PriorityAppraisalandMortgageServicesInc.appraiserxsites.com

Appraising in Flood Plains