| a. | Fee Land. On fee land, appraisers should undertake a standard analysis of the property value, including estimating the value of the land. The value of the land is therefore included in the total value stated in the appraisal report. |
Land acquisition costs are also considered a component of the total cost to acquire or construct a property. If the borrower already owns this land, it may be used as a portion of the borrower investment in the property. See Paragraph 5.9d for more information.
| b. | Allotted Trust Land and Tribal Trust Land. The cost approach is often the primary indication of value based on the unique nature of the reservation setting. Lenders and appraisals should refer to Appendix A-2, Appraisal of Single Family Homes on Native American Lands, Page A-4, HUD Handbook, 4150-2, Valuation Analysis for Home Mortgage Insurance for Single Family One-to-Four, for additional guidance in determining the exact methods of appraisal for trust land. A copy of the handbook can be obtained on the following website: http://www.hud.clips.org. |
