Appraisers' Free Forum

Here's the latest release from Fannie about manufactured/modular homes.

Announcement 07-12

That affidavit of affixture is interesting. Its a good idea, I just wonder if, as an appraiser, you need to require that as a part of your file too. I'd say yes. Means the lender has some up front work to do, which they probably don't know how to do and will try to pass off to the appraiser.

[font=Comic Sans MS]Agreed Edd. Except that is a term that is specific to AZ (I think). NM does not issue any such certificate here so there terminology and requirements are mute. And I also agree with you that the "lender" (aka MB) will attempt to pass it off on us as appraisers.[/font]

Finally, in the fifth requirement, Affidavit of Affixture, we stated that if assistance is needed in preparing an acceptable affidavit, the lender should contact its Regional Fannie Mae Customer Account Manager. This guidance can be provided by the Customer Account Team upon request.
As a reminder, the Affidavit of Affixture must affirm that borrower and lender intend for the manufactured home to be a permanent part of the real property. Any form of affidavit that meets the Guide requirement is acceptable. An affidavit that meets the following standards is an example of one that would comply with our requirements. The document must:
• be in an affidavit format;
• be dated, notarized and recorded, if possible;
• identify the property;
• contain the printed name and signature of the borrower and lender;
• comply with applicable federal, state and local law;
• include the following language: “Borrower and Lender state that it is their intent that the manufactured home be and remain permanently attached to and part of the real property, and that it be regarded as an immovable fixture thereto and not as personal property.”
• be maintained in the loan file.

Tennessee's got a bizarre system. Whether a MH is real property or not depends on the intent of the owner, and wether the property would be damaged in the process of removal.

The answer to the question, "When does a MH become real property instead of chattel property?" cost me a $500 legal fee for a memorandum of law.

https://www.efanniemae.com/sf/guides/ss ... achousing/

Click on your state to find out what is required (by the lender to do before selling to Fannie Mae) in your area.

I include a copy of the recorded Affidavit of Affixture in my reports. Or if one has not been recorded, that is the first paragraph in my expanded comments section. For example: "Subject was taxed as personal property on the personal property roll in 2006, taxes for the manufactured housing unit were $432.52. The land, improvements to the land and on the land were taxed on the real property roll, $252.74 for the 2006 tax roll. Recording of an Affidavit of Affixture would be required to enable the manufactured housing unit to be taxed as real property. Due to the scheduling of the tax year, recording of the Affidavit of Affixture between September 15, 2006 and September 15, 2007 would apply to the 2008 tax year."

Now it is the underwriter's problem.

I went on the link JoAnne provided and according to what I read there AZ follows a very similar procedure as CO. I didn't look at everywhere else. I think Fannie is talking about an affidavit of affixture signed by the borrower and lender no matter where you may be. Are you real sure this isn't a fannie end run around purging title and personal property being characterized by taxation? I think this is new stuff. Put your appraiser antennae up. JoAnne read this stuff and tell us what it means.

Fannie Mae, Freddie Mac, FHA have had the policy for years that the manufactured home is to be taxed as real property. Arizona came up with the Affidavit of Affixture in 1980 for double sectionals and 1989 for single sectionals to meet those lenders requirements of a recorded document as proof the home is being taxed as real property. So there have been variations of this since HUD code went into effect in 1976 and thirty year loans became available for manufactured homes included with land. Other states use terms like deactivate or surrender, purge, etc, etc. The original title from the motor vehicle department (which is used for personal property) has to be surrendered, purges, deactivated; erased from motor vehicle department records in some way. Some states only have a paper trail (like Arizona) for taxation purposes without any physical inspection. Other states require an inspection by a local government official to see if the physical requirements have been met (California's 433A system is an illustration). All of this is the underwriter's responsibility to verify. In some states the paperwork is handled by an attorney, in other states by a title company.

So whatever documentation your state requires, research and report what you find. Then the underwriter has to go to work and make sure whatever is missing or needed is taken care of prior to funding. If they don't all they have for collateral is a vacant piece of ground no matter what your appraisal says.

Read the information for your state, talk to assessment and tax offices, building departments, etc, etc to find out how that data is processed and if of an assessable public record somewhere either keep a copy in your file or include with your report like I do.