FHA Single Family Housing Policy Handbook 4000.1, II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT > D. APPRAISER AND PROPERTY REQUIREMENTS FOR TITLE II FORWARD AND REVERSE MORTGAGES > 7. Valuation of Leasehold Interest — c. Required Analysis and Reporting

hud-4000-1-ii-c-required-analysis-and-reporting

HUD effective date: 01/24/2022 · section II.D.7 · Handbook 4000.1

FHA Single Family Housing Policy Handbook 4000.1, Part II — c. Required Analysis and Reporting (01/24/2022).

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Verbatim regulatory text (1)

Verbatim provisions from FHA Single Family Housing Policy Handbook 4000.1, II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT > D. APPRAISER AND PROPERTY REQUIREMENTS FOR TITLE II FORWARD AND REVERSE MORTGAGES > 7. Valuation of Leasehold Interest — c. Required Analysis and Reporting — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

FHA Single Family Housing Policy Handbook 4000.1, Part II — c. Required Analysis and Reporting (01/24/2022)

Effective 2022-01-24 · publisher's stamp for this provision

c. Required Analysis and Reporting (01/24/2022) The Appraiser must obtain a copy of the lease from the Mortgagee. The Appraiser must analyze and report the terms of the ground lease, including the amount of the Ground Rent, the term of the lease, if the lease is renewable, if the lessee has the right of redemption (the right to obtain a Fee Simple title by paying the value of the Leased Fee to the lessor, thereby canceling the Ground Rent), and if the Ground Rent can increase or decrease over the life of the lease term. The Appraiser must estimate and report the value of the Leasehold Interest. In valuing the Leasehold Interest, the Appraiser must apply the appropriate techniques to each of the approaches to value included in the analysis. • In the cost approach, the value of the land reported must be its Leasehold Interest. • In the GRM income approach, the sales used to derive the GRM factor must be based on properties under similar Ground Rent terms (or be adjusted to similar Ground Rent terms). • In the sales comparison analysis, the comparable sales must be adjusted for their lack of similarity to the subject in the “Ownership Rights” section of the Sales Comparison Approach (SCA) Grid.

Source: FHA Single Family Housing Policy Handbook 4000.1, Update 18 (issued 2026-08-12) · source URL · snapshot e1bca3432cf19e09

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