Sec. 05.06.01.11. Valuation

A. Appraisal Requirement.

(1) The Fund shall, at its option, either obtain, or have the lender obtain, an independent appraisal of any project for which insurance is sought, or require the borrower to submit an appraisal.

(2) Appraisal Report.

(a) The appraisal report shall be prepared by a certified appraiser and submitted by the borrower or an independent appraiser before initial insurance endorsement of a loan. The appraisal shall include the income, cost, and market comparable approaches to valuation.

(b) The Fund may determine in its sole discretion those projects for which an independent appraisal will be required, based upon the risk of insurance loss to the Fund and the project's cost, location, and market.

(c) An independent appraisal may be obtained by the Fund at its expense, but the cost shall be reimbursed to the Fund at the time the loan is endorsed for insurance.

B. Appraisal Review.

(1) The Fund shall review each appraisal, whether provided by the borrower or an independent appraiser, to determine its accuracy, completeness, and adherence to accepted standards of appraisal practice. The Fund review shall consider the extent of research and methods used and shall otherwise determine that the appraisal was done in accordance with appropriate appraisal practice and standards.

(2) The Fund also may evaluate appraisals whether provided by the borrower or obtained independently by the Fund, and the valuation given by the Fund review appraiser doing the evaluation shall be used by the Fund in considering an application for mortgage insurance.