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b. Section 247 Hawaiian Home Lands Program (09/20/2021)
Due to the nature of the title and property rights, the Appraiser must develop the cost for both Existing and New Construction. When appropriate, the Appraiser must attempt to apply the income and sales comparison approaches.
The Appraiser must include the following language in the appraisal report: “The value defined for this appraisal is not ‘Market Value’ as defined in the standard documents of form appraisal reports. This appraisal has been completed for FHA mortgage insurance purposes, per HUD instructions for Department of Hawaiian Home Lands (DHHL) properties.”
The Appraiser must develop a cost approach from a published cost service in addition to developing the cost approach described. The appraisal report must include:
• photocopies of all pages used to derive the cost figures, except as noted below;
• application of all current multipliers necessary and published by the cost service;
• no marketing expense to the cost analysis of a DHHL property appraisal because these Properties are not freely marketable;
• entrepreneurial venture may only be included if reasonable profit and overhead are not already included in all costs; and
• depreciation due to normal aging, which may be derived from the tables in the cost service book. Depreciation from incurable external or functional obsolescence should be based on verifiable market extractions, by paired-sales analysis and capitalized rent loss.
The Appraiser may use a computer-generated cost analysis provided it contains sufficient information to verify that all significant property features have been properly addressed in the cost analysis. Accordingly, the Appraiser will not be required to supplement a computer- generated cost analysis with photocopies from the cost service book.