HUD 221(d)(4) Appraisals
If you're committed to getting a HUD 221(d)(4) loan, part of the HUD multifamily application process will involve hiring a property appraiser to do a full HUD property/project appraisal. In doing so, they will examine all aspects of the project, including basic property information, local property trends, the size, composition, and rent of each unit, project and unit amenities, and estimates of the project's potential income and expenses.
Major Components of the HUD Multifamily Appraisal Process
The HUD 221(d)(4) appraisal process has many parts. To make it easier to understand, it can be divided into several main elements, including:
Basic information: Project size, number of units, foundation information, and planned recreation areas, etc.
Neighborhood information: Neighborhood market data like growth rate, land use, and other information
Site and additional property information: Zoning compliance, market rent plans, purchase price, date acquired, and similar data
Estimate of income: Monthly unit rents, types of units, other sources of revenue (parking, laundry, etc.)
Amenities and services included in rent: Kitchen appliances, balcony, carpeting, etc.
Unit rating/project rating: Adequacy/quality of room size and layout, closets, general project appearance, density, review of overall project amenities and recreational options
Estimate of annual expense: Advertising and management costs, maintenance, overall building utilities
Financial metrics and other information: Income computations, acquisition costs, construction costs analysis, etc.
To learn more, you can go directly to the HUD Multifamily Summary Appraisal Report, which provides detailed information about all the parts of the process.