§4103 Appraisal and Preservation Value of Eligible Low-income Housing

Summary

When an owner files a notice saying they want to extend low-income rules or transfer a low-income housing project, the Secretary must have the property's preservation value appraised. Two independent appraisers do the work: one picked by the Secretary and one picked by the owner. The appraisals must be done within 4 months after the notice is filed. The owner must give the Secretary the appraisal their appraiser made no later than 90 days after getting the Secretary’s written notice. If the two appraisers and the parties cannot agree, they must pick a third appraiser together and pay that person; that third appraisal is final. The Secretary must send the owner a written notice within 30 days after the filing that explains the need for an appraisal, the rules and deadline, that the Secretary’s appraiser must inspect the property and records, and whether a State agency is handling any part. An approved plan can only rely on an appraisal that is no more than 30 months old. Preservation value means fair market value. For extending affordability, it is the value if the property’s best use is as residential rental housing. For transfers, it is the value based on the property’s highest and best use. The Secretary must give written appraisal guidelines. The guidelines assume repayment of any federal mortgage, ending the low-income rules and federal rental aid, and costs to follow state or local laws. They may use State agency rehab assessments. Appraisers must use the greater of actual operating costs (average of the past 3 years) or projected post-conversion costs. The guidelines must follow normal appraisal standards and say how to figure rehab and other conversion costs for both market-rate rental conversion and highest-and-best-use conversion.