Property Valuation
An appraiser is valuing a property for mortgage lending purposes. The appraisal report must be completed on a form compliant with:
AMassachusetts Board of Registration standards only
BUSPAP (Uniform Standards of Professional Appraisal Practice)✓ Correct
CRESPA disclosure requirements
DHUD Minimum Property Standards only
Explanation
Appraisals for mortgage lending must comply with USPAP, the Uniform Standards of Professional Appraisal Practice, established by the Appraisal Standards Board. USPAP compliance is required for federally regulated lending.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
State-Specific Concepts
Disclosure Requirements
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