FHA Protocol for Reporting Data for a One-Unit Dwelling

1. FHA Protocol for Reporting Data for a One-Unit Dwelling Chapter 4

2. Chapter 4: FHA Protocol for Reporting Introduction • The Fannie Mae 1004 URAR report form is designed to report an appraisal of a one-unit property and the report form includes a specific data reporting process. • The FHA now requires that the URAR (Uniform Residential Appraisal Report) and the Individual Condominium Unit Appraisal Report be in compliance with UAD requirements.

3. Chapter 4: FHA Protocol for Reporting Key Terms • Accessory Dwelling Unit A separate additional living unit, attached or detached from the primary residential unit on a single-family lot. • Accessory Unit Defined as a habitable living unit added to, created within, or detached from a single-family dwelling that provides the basic requirements for living. • Built-Up Percentage The percentage of available land that has been improved.

4. Chapter 4: FHA Protocol for Reporting Key Terms • Census Tract Number A unique method of designating census tracts by the U.S. Census Bureau. • Days on Market (DOM) The total number of continuous days from the date that a property is listed or advertised for sale through the date that it is taken off the market or contracted for sale. • FHA Case Number The number assigned to a mortgage case file.

5. Chapter 4: FHA Protocol for Reporting The URAR and UAD Compliance • The FHA requires UAD compliance with the 2055 (exterior inspection only, single-family house) and the 1075 Condominium (exterior inspection only) reports. • FHA Roster appraisers must become familiar with the modified appraisal forms. • FHA Roster appraisers must comply with the instructions and requirements as stated in Appendix D. • All FHA appraisal reporting requirements remain in effect and appraisers must continue to act with due diligence to produce an accurate appraisal.

6. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 1: Subject • File Number* • Insert the FHA Case Number, the number assigned to a mortgage case file. The FHA appraisal may not be transmitted to the lender without a case number. • Property Address • Identify the subject property by its complete property address and legal description; a post office box number is not acceptable. • The following address information must be entered: • Street number • Street name • City • USPS two-letter state or territory abbreviation • 5-digit ZIP Code or ZIP+4 code

7. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 1: Subject (cont.) • Borrower • Enter the name of the borrower/mortgagor. • Owner of Public Record • Enter the owner’s name as listed in public records. If the seller is not the owner of public record, the appraiser should explain the results of his research in detail. • County • Enter the name of the county in which the property is located. • Legal Description • Enter the legal description of the property. The four types of legal descriptions are: Lot and block system, geodeticsurvey, governmentsurveysystem, and metesandboundssystem.

8. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 1: Subject (cont.) • Assessor’s Parcel # • Enter the parcel number assigned by the local tax assessor. The parcel number(s) should be in the same format used by the taxing agency. • Tax Year/Real Estate Taxes • Enter the year, using four digits, and the annual sum of all taxes in whole dollars only. • Neighborhood Name • Neighborhood name refers to the name of the subdivision or the commonly known local neighborhood designation. • Map Reference • Enter location map reference, page number, and coordinates from the source used.

9. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 1: Subject (cont.) • Census Tract • Enter the census tract number, a unique method of designating census tracts by the U.S. Census Bureau. Census tract numbers have four digits and may have a two-digit decimal suffix. • Occupant • Indicate, whether the subject property is occupied by the owner/tenant, or is vacant as of the effective date of the appraisal. If vacant, it should be noted in the Improvements section and if the utilities were on during the appraisal. • Special Assessments $ • The appraiser should enter any special assessment applicable to the subject property. It must be expressed as an annual amount in whole dollars. • Homeowners Association (HOA) Fees • The appraiser must enter, in whole dollars, all applicable homeowners association (HOA) fees associated with the subject property. If there are multiple fees assessed, the appraiser must first convert the fees to the appropriate frequency and then report the total of all fees in this data field.

10. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 1: Subject (cont.) • Property Rights • Mark the appropriate box indicating the property rights appraised for the subject property as of the date of the appraisal. “Other” includes land trust. • Assignment Type • The appraiser must indicate the transaction type for the assignment, Purchase, Refinance, or Other. • Lender/Client Address • The appraiser must enter the name (and address) of the lender. Any applicable AMC name should only be entered in the Appraiser Certification Section.

11. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 1: Subject (cont.) • Currently Offered for Sale or Offered for Sale in Last 12 Months • Any prior offering of the property in the 12 months prior to the effective date of the appraisal must be disclosed. • If the answer is Yes, the following information is required: • Days on Market (DOM) – The appraiser must enter the DOM for the subject property (numeric to 4 digits). DOM is defined as the total number of continuous days from the date that a property is listed or advertised for sale through the date that it is taken off the market or contracted for sale. If the subject property was not individually listed or advertised for sale, enter zero (0). If the DOM is unknown, enter ‘Unk.’ • Offering Price(s) – The appraiser must report the original offering price and a history of price changes, if any, in whole dollars only. • Offering Date(s) – The appraiser must report the date(s) that the property was offered for sale in MM/DD/YYYY format. • Data Source(s) Used – The appraiser must report the data source(s) used to obtain the offering information.

12. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 2: Contract • This section must be completed when the appraisal assignment involves a purchase transaction, otherwise enter “N/A.” • The FHA requires that the appraiser be provided with a complete copy of the ratified sales contract, including all addenda, for the subject property. • Section 2 provides the agreed upon contract price, date of sale, and all financial terms implicit in the offer. • If you are unable to obtain this information, state what efforts were made to obtain it.

13. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 2: Contract (cont.) • Analyze Contract for Sale • First, confirm if the appraiser did or did not analyze the sales contract. • Next, the appraiser must indicate the type of sale for this transaction from the dropdown list of available choices. The valid sale types are: • REO sale • Short sale • Court-ordered sale • Estate sale • Relocation sale • Non-arms length sale • Arms length sale • Once a valid sale type has been chosen, provide an explanation of the results of the analysis of the contract.

14. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 2: Contract (cont.) • Contract Price/Date of Contract • Contract price must be the same as the sales price for the subject property in the Sales Comparison Approach section and stated in whole dollars only. • The contract date must be stated in DD/MM/YYYY format. • Is the Property Seller the Owner of Public Record Data Source(s) • Mark the box indicating whether the seller is the owner of public record. The property may not be eligible for FHA financing if it involves flipping. • Sales Concessions Down Payment Assistance • The appraiser must indicate “Yes” or “No” if the “Assignment Type” is a purchase transaction. If “No” is selected, a zero must be entered. • If “Yes” is selected, enter the total dollar amount of all financial assistance paid by any party on behalf of the borrower. If there is any unknown financial assistance amount, the text “There is a financial assistance amount that is unknown” will appear in this field. The appraiser must then provide a description of the items being paid.

15. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 3: Neighborhood • Neighborhood Characteristics • Location • Enter the type of area surrounding the subject property • Urban • Suburban • Rural • Built-Up • Enter the built-up percentage—the percentage of available land that has been improved. • Growth • Enter the growth rate. If many lots are available, the growth rate may be rapid, stable, or slow, but if the neighborhood is fully developed, select the “Stable” box.

16. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 3: Neighborhood: One-Unit Housing Trends • Property Values • Mark the box describing the current trend in property values for one-unit single-family homes in the community. • Demand/Supply • To determine the equilibrium status of supply and demand in the neighborhood, compare the number of houses sold to the number of houses listed for sale in a recent time period. The similarity or difference between the number of houses sold and listed should determine the demand/supply level. • Marketing Time • Mark the appropriate marketing time—the typical length of time a property similar to the subject property has to stay on the market before being sold at a price near market value.

17. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 3: Neighborhood: One-Unit Housing • Price/Age • The appraisal report must indicate the age range and predominant age of properties in the subject neighborhood. The appraiser can state the predominant age as a single figure, or as a range. • The age of a property should be within the general age range of the neighborhood.

18. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 3: Neighborhood: Present Land Use Percentage • One-unit, 2- to 4-unit, Multi-family, Commercial, Other • Estimate each type of land usage in the neighborhood. If there is no land in the neighborhood with one of the designated classifications, enter a “0.” If a portion of the land consists of parks or other unspecified classifications, enter the estimated percentages on the “Other” line and explain in the Neighborhood Description section.

19. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 3: Neighborhood: Neighborhood Narrative • Neighborhood Boundaries • Neighborhood boundaries can be identified by various physical characteristics and natural boundaries defining the subject neighborhood from another. The appraiser must include an outline of the neighborhood boundaries. • Neighborhood Description • When different land uses and property types are present in a neighborhood, this is a neighborhood characteristic the appraiser needs to take into consideration when performing the neighborhood analysis and defining the neighborhood boundaries.

20. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 3: Neighborhood: Neighborhood Narrative (cont.) • Market Conditions • The appraiser should explain any changes that might influence the marketability of the properties in the neighborhood. Note: Development of a valuation conclusion based—either partially or completely—on the sex, race, color, religion, handicap, national origin, or familial status of either the prospective owners or occupants of the subject property or the present owners or occupants of the properties in the vicinity of the subject property is prohibited.

21. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 4: Site • Dimensions • List all dimensions of the site, beginning with the frontage. If the site is irregular, show the boundary dimensions, or attach a property survey, site plan, or plat/legal description with the comment “See attached.”Do not list site area. • Area • For sites/parcels that have an area of less than one acre, the size must be reported in square feet (“sf”). For sites/parcels that have an area of one acre or greater, the size must be reported in acreage (“ac”) to two decimal places. No other data is permitted. • Area less than one acre – whole numbers only (no comma) + sf • Area equal to one acre or more – numeric to 2 decimals + ac • Shape • Describe the shape of the site.

22. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 4: Site (cont.) • View • First, the appraiser must select, from a dropdown list, one of the ratings shown below to describe the overall effect on value and marketability of the view factors associated with the subject property.

23. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 4: Site (cont.) • View (cont.) • Next, the appraiser must select, from a second dropdown list, at least one, but not more than two, view factor(s). • Other • If a view factor not on this list materially affects the value of the subject property, the appraiser must enter a description of the view associated with the property. The description entered must allow a reader of the appraisal report to understand what the view associated with the property actually is. Descriptors such as “None,”“N/A,”“Typical,”“Average,” etc., are unacceptable.

24. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 4: Site (cont.)

25. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 4: Site (cont.) • Specific Zoning Classification • Enter the specific zoning classification used by the local municipality or jurisdiction or enter “None exists.” • Zoning Description • Describe what the specific classification means. Include a general statement describing what the zoning permits. If none exists, describe the prevalent use of sites in the neighborhood. • Zoning Compliance • Mark whether the current use is legal, legal non-conforming, no zoning, or illegal use. • If the existing property does not comply with current zoning regulations but is accepted by the local zoning authority, enter “Legal non-conforming” and provide a brief explanation. • If the use is not legal, the property is not eligible for FHA mortgage insurance.

26. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 4: Site (cont.) • Highest and Best Use • This entry questions the categorization as the highest and best use of the site as improved or as proposed and completed, in relation to the neighborhood and current market conditions. • Utilities • Mark either “Public” or “Other.” Public utilities are governmentally supplied and regulated. • Visually inspect the septic system and its surrounding area. If there are obvious signs of system failure, mark “Require inspection.” • Off-Site Improvements: Type • Briefly describe the off-site improvements under Type. Enter road surface material and mark “Public” or “Private.” • Public refers to an improvement dedicated to and accepted by a unit of government—not including HOAs.

27. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 4: Site (cont.) • (FEMA) Special Flood Hazard Area • FEMA is responsible for mapping flood hazard areas. If the property is in a special flood hazard area, mark “Yes.” Otherwise, mark “No.” • Attach a copy of the flood map panel for properties located within an identified flood hazard area. • FEMA Flood Zone • Properties within special flood hazard areas, such as zones A—a special flood hazard area, and V—a coastal area, require flood insurance. Zones B, C, and X do not. • FEMA Map # and FEMA Map Date • Enter the FEMA map number and map date. If it is not shown on any map, enter “Not mapped.” • Utilities and Off-Site Improvements Typical for Market Area • Indicate whether the utilities and off-site improvements are typical for the market area. If “No” is marked, describe what is typical.

28. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 4: Site (cont.) • Any Adverse Site Conditions or External Factors • Indicate if there are adverse site conditions or external factors. • If “No” is marked, no comment is necessary; if “Yes” is marked, an explanation is required. • Describe any adverse site conditions or adverse factors. Consider easements affecting the functional utility of the property in the conclusions of both the highest and best use and market value. • List any adverse environmental conditions. • Explain all deficiencies that do not require repair and consider them in the opinion of value. • Discuss the observations in direct relationship to value and consider them in the approaches to value.

29. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 5: Improvements • Accessory Unit • A habitable living unit added to, created within, or detached from a single-family dwelling that provides the basic requirements for living, sleeping, eating, cooking, and sanitation • Accessory Dwelling Units (ADUs) • Separate additional living units, including separate kitchen, sleeping, and bathroom facilities, attached or detached from the primary residential unit, on a single-family lot. • Attached Units • “Mother-in-law” apartments in a single-family home

30. Chapter 4: FHA Protocol for Reporting URAR Report Form Section 5: Improvements (cont.) • FHA Criteria • An accessory dwelling unit may or may not be incorporated within, or detached from, a single-family structure. Accessory units may not be subdivided or otherwise segregated in ownership from the primary residence structure. • Accessory units may predate the adoption of local zoning ordinance and may be classified as legal nonconforming units.

31. Chapter 4: FHA Protocol for Reporting Section 5: Utility Service Requirements • Units • Mark the appropriate box. The URAR is designed for a one-unit dwelling or one-unit with an accessory unit. • Number of Stories • The appraiser must indicate the number of stories, numerically to two decimal places, for the subject property. • Type • Mark the box that identifies the type of dwelling, “Det.” (Detached), “Att.” (Attached), “S-Det.” (Semi-Detached), or “End Unit.” • Stage of Construction • Mark the box signifying the stage of construction, “Existing,”“Under Construction,” or “Proposed.” Properties that are proposed or under construction require plans and specifications for appraiser review.

32. Chapter 4: FHA Protocol for Reporting Section 5: Utility Service Requirements (cont.) • Design (Style) • The appraiser should enter an appropriate architectural design (style) type descriptor that best describes the subject property. • Do not use descriptors such as “Brick,”“2 stories,”“Average,”“Conventional,”“Traditional,” or “Typical” as these are not architectural styles. • Year Built • The appraiser must indicate the year the subject property was built. If it is unknown, the estimate the year. • Year Built – 4-digit number, yyyy • Estimation of Year Built – A tilde (~) must be placed before the estimated year built. • Effective Age (Years) • Enter the effective age of the improvements. A range is acceptable.

33. Chapter 4: FHA Protocol for Reporting Section 5 (cont.) • Attic • Enter the attic and observe the interior roofing for necessary insulation and ventilation, etc., as well as deficient materials or damage. • If deficiencies exist, condition the appraisal on the repair and prepare the appraisal “subject to repairs” and/or “subject to inspection.” The appraiser must enter the attic, at a minimum, by head and shoulders, whether access is by pull-down stairway or scuttle. • Foundation • The appraiser must inspect the foundation and the basement to address all visible deficiencies and possibly require a recommendation for an inspection.

34. Chapter 4: FHA Protocol for Reporting Section 5: Basement • May be partially or completely below grade. • The basement should not be counted in the finished gross living area at the grade level. • Concrete Slab • Mark this box if any part of the foundation system has concrete slab. • Crawl Space • Mark this box if any part of the foundation system has crawl space. • Access to the space should be clear. • Check the distance from the bottom of the floor joists to the ground. A minimum distance of 18 inches from the ground to the bottom of the joists is highly recommended. • Check for insulation and ventilation and structural problems.

35. Chapter 4: FHA Protocol for Reporting Section 5: Basement (cont.) • Full Basement • Mark this box if there is a full basement. • Partial Basement • For a dirt basement floor, determine whether it is typical for the area and readily marketable. If so, installing a concrete basement floor is not required. • Basement Area and Finish • If a basement exists, the appraiser must indicate the basement size in square feet and the percentage of finished basement. • Basement Area – Numeric to five (5) digits, whole numbers only • Basement Finish – Numeric to three (3) digits, whole numbers only • Outside Entry/Exit • Mark only if there is an outside entry/exit; otherwise, leave blank. • Sump Pump • Mark this box only if there is a sump pump.

36. Chapter 4: FHA Protocol for Reporting Section 5: Basement (cont.) • Evidence of Infestation • Examine the property for observable evidence of wood-boring insects. • Inspections are necessary when there is evidence of decay, pest infestation, suspicious damage, or when it is area custom or required by state law. • Evidence of Dampness • Examine the foundation/basement for dampness or readily observable evidence of water damage. • Basement or crawl space area must not have excessive dampness or ponding of water. • If any of these inadequacies exist, condition the appraisal “Subject to repairs” or “Subject to inspection.” • Evidence of Settlement • Examine foundation for readily observable evidence of settlement. • Horizontal cracks, bulging walls, or separation of sill plate from top of foundation wall are critical and require inspection.

37. Chapter 4: FHA Protocol for Reporting Section 5: Mechanical Systems • Heating/Cooling • The appraiser should select the heating and/or cooling types. • Enter an “X” in the box indicating the type of cooling system: “Central Air Conditioning,”“Individual,” or “Other.” If “Other” is marked, provide a brief description. • Turn on the air-conditioning system to test for indications of a defective unit, etc. However, do not operate the system if doing so may damage equipment or when temperatures outside will not allow system to operate. • Note significant holes/deterioration on the unit. • Fuel • Enter type of fuel used.

38. Chapter 4: FHA Protocol for Reporting Section 5: Exterior Materials/Condition • Foundation Walls • Enter the material type: brick, stone, etc., and rate the condition. • Exterior Walls • Enter the material type: Aluminum, vinyl siding, etc. If a combination of materials, show the predominant portion and rate the condition. • Roof Surface • Enter the material type: Composition shingle, asphalt shingle, wood, etc., and rate the condition. • View the roof from ground level to determine sufficient roof integrity. • Check for evidence of leakage or abnormal condensation. • Note any evidence of deterioration of roofing materials. • If the roof is unobservable, look for telltale signs of roof problems on the interior. • The appraiser must note if the roof area could not be adequately observed. • Based on the appraiser report, the underwriter will determine if a roofing inspection is required.

39. Chapter 4: FHA Protocol for Reporting Section 5: Exterior Materials/Condition (cont.) • Gutters and Downspouts • Enter the material type: Galvanized, aluminum, etc., and rate the condition. • Window Type • Enter window type and identify the window frame material. Rate the condition. • Bedroom windows with security bars require a quick release mechanism for emergency egress. If not so equipped or inoperable, condition the appraisal on a “Required Repair.” • Storm Sash/Insulated • Describe storm sash material or state if windows are double glazed, etc., or a combination of the two. Rate the condition. • Screens • Describe style (full, half, none) and rate the condition.

40. Chapter 4: FHA Protocol for Reporting Section 5: Amenities • Woodstove(s)/Fireplace(s) • Enter an “X” if this amenity exists and provide a specific number. • Other Amenities • Enter an “X” if an amenity (patio/deck, pool, fence, porch, or other amenity) exists and describe the material/type in additional features.

41. Chapter 4: FHA Protocol for Reporting Section: 5 Interior Materials/Condition • Enter the material type and rate the condition for the following fields: • Floors • Tile, hardwood, carpet, etc. • Walls • Plaster, drywall, paneled, etc. • Trim/Finish • Wood, metal, vinyl, etc. • Bath Floor • Ceramic, tile, vinyl, etc. • Bath Wainscot • Ceramic tile, fiberglass, etc.

42. Chapter 4: FHA Protocol for Reporting Section 5: Car Storage • Car Storage • Driveway: # of Cars • Enter the number of cars that can be parked. • Driveway Surface • Enter the surface type. • Garage: # of Cars • Enter the number of cars the structure can accommodate. • Carport: # of Cars • Enter the number of cars the structure can accommodate. • Garage/Carport Type • Designate whether the type is “Attached,” (“Att.”) “Detached,” (“Det.”) or “Built-in” (“Built-in”).

43. Chapter 4: FHA Protocol for Reporting Section 5: Appliances • Enter an “X” in each field if the item exists and enter “P” if the item is personal property. • Refrigerator • Range/Oven • Dishwasher • Disposal • Fan/Hood • Microwave • Washer/Dryer • Other • Do not include personalty.

44. Chapter 4: FHA Protocol for Reporting Section 5 (cont.) • Gross Living Area: • A dining area built as an L-shape off the kitchen may or may not be considered a room, depending on the size. • To determine whether one or two rooms should be counted, hypothetically insert a wall to separate the two areas that have been built as one. If the residents can use the resulting two rooms with the same utility without increased inconvenience, count the room as two. • If the hypothetical wall would result in a lack of utility and increased inconvenience, count the room as one. Typically, the foyer, bath, and laundry room are not counted as rooms.

45. Chapter 4: FHA Protocol for Reporting Section 5: Room Count and Gross Living Area • Finished Area Above Grade Contains • Enter the total number of finished bedrooms and rooms above grade numerically, using whole numbers. • For baths, the appraiser must enter the total number of full baths and partial baths above grade numerically to two decimal places. • A three-quarter bath is to be counted as a full bath. • Quarter baths are not to be included in the bathroom count. The number of full and half baths must be entered, separated by a period. • The full bath count is represented to the left of the period. The half bath count is represented to the right of the period.

46. Chapter 4: FHA Protocol for Reporting Section 5: Narrative Comments Section • Additional Features • Describe special energy-efficient features, such as solar energy or geothermal systems. • Elaborate on any special or unusual items. • Condition of the Property • The appraiser must provide the following information: • Overall Condition Rating – The appraiser must select one of the following ratings that best describes the overall condition of the subject property or unit (C1, C2, C3, C4, C5, C6). Only one selection is permitted. • The appraiser must indicate “Yes” or “No” if there has been any material work done to the kitchen(s) or bathroom(s) in the prior 15 years.

47. Chapter 4: FHA Protocol for Reporting Section 5: Narrative Comments Section (cont.) • Condition of the Property (cont.) • Kitchen(s) and Bathroom(s) – Level of Work Completed and Timeframes – The appraiser must identify any work completed in the kitchen(s) and bathroom(s) along with the timeframes in which the work was completed. • Level of Work Completed: • Not updated • Updated • Remodeled • Timeframes: • Less than one year ago • One to five years ago • Six to ten years ago • Eleven to fifteen years ago • Timeframe unknown

48. Chapter 4: FHA Protocol for Reporting Section 5: Narrative Comments Section (cont.) • Physical Deficiencies or Adverse Conditions • Indicate whether there are any adverse conditions or physical deficiencies that affect the livability, soundness, or structural integrity of the property. • Lead-Based Paint Hazard: For all FHA-insured properties, correction is required to all defective paint in or on structures and/or property improvements built before January 1, 1978, in accordance with 24 CFR Part 35. • Observe all interior and exterior surfaces for defective paint. • Note any areas affected and condition the appraisal on their repair. • Property Conformity • Indicate if the subject generally conforms to the neighborhood.

49. Chapter 4: FHA Protocol for Reporting Condition Rating Definitions • C1 • The improvements have been very recently constructed and have not previously been occupied. The entire structure and all components are new and the dwelling features no physical depreciation. • C2 • The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. • C3 • The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well maintained.

50. Chapter 4: FHA Protocol for Reporting Condition Rating Definitions (cont.) • C4 • The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been adequately maintained and requires only minimal repairs to building components or mechanical systems and cosmetic repairs. All major building components have been adequately maintained and are adequate. • C5 • The improvements feature obvious deferred maintenance and are in need of some significant repairs. Some building components need repairs, rehabilitation, or updating. The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains useable and functional as a residence. • C6 • The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety, soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many or most major components.