CRU Property Appraisal & Valuation Flashcards
6 cards from real CRU practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CRU Property Appraisal & Valuation flashcards as text
A property is located adjacent to a commercial trucking depot. What type of depreciation should the appraiser consider?
Answer: External obsolescence
External obsolescence (also called economic obsolescence) is value loss caused by factors outside the property, such as proximity to a noisy or odorous commercial use.
Fannie Mae's Collateral Underwriter (CU) assigns risk scores to appraisals on a scale of 1 to 5. What does a CU score of 5 indicate?
Answer: The appraisal has the highest risk flags and likely overvaluation concerns
A CU score of 5 represents the highest level of risk, suggesting potential overvaluation or appraisal quality issues that warrant additional review.
What is the definition of 'market value' as used in conventional residential appraisals?
Answer: The most probable price a property should bring in an arm's-length transaction under normal market conditions
Market value is the most probable price achievable in an open, competitive market between informed, willing parties with neither under compulsion.
Which statement about an 'as-is' versus 'as-completed' appraisal is correct in the context of a renovation loan?
Answer: 'As-completed' reflects the projected value after planned renovations are finished
For renovation loans, the 'as-completed' value is a hypothetical appraisal estimating the property's worth after all planned improvements are made.
What does FIRREA require regarding the selection of appraisers for federally related transactions?
Answer: Appraisers must be state-licensed or state-certified and independent from the loan production function
FIRREA mandates that federally related transactions use state-licensed or state-certified appraisers who are independent from the loan origination process.
When reviewing an appraisal for a condominium unit, which additional document should the underwriter obtain to assess project eligibility?
Answer: Condo project approval documentation and homeowner association financial statements
Condo underwriting requires reviewing project approval status, HOA finances, owner-occupancy ratios, and litigation history, not just the unit appraisal.