In the present land use section of a Fannie Mae report, what must the percentages of land uses total, and where is undeveloped land reported?
Correct Answer
A) 100%, with undeveloped land reported as “Other”
The appraiser reports the relative percentages of developed land uses, reports undeveloped land in the “Other” field, and the total of all land uses must equal 100%.
Why This Is the Correct Answer
Option A is correct because Fannie Mae's Selling Guide states that undeveloped land must be reported in the 'Other' field and that the total of the types of land uses must equal 100%. If there is significant undeveloped land, the appraiser must also comment to confirm the neighborhood is adequately described.
Why the Other Options Are Wrong
Option B: 100%, with undeveloped land omitted from the total
Option B gets the 100% total right but says undeveloped land is omitted from the total. Fannie Mae requires undeveloped land to be reported in the 'Other' field, and the total counts it, so omitting it is incorrect.
Option C: Any total, since percentages are estimates
Option C says any total is acceptable because the percentages are estimates. Although the percentages are estimates, the land uses must total 100%.
Option D: 50%, with the rest reported as zoning
Option D says the uses total 50% with the rest reported as zoning. Zoning is not a land use category in this section, and the total must be 100%.
Whole pie, vacant in Other
Think of the neighborhood as a pie that must add up to 100%, with vacant land getting its slice under 'Other'.
How to use: Use this image when answering questions about the present land use section.
Exam Tip
Look for both parts of the rule in the answer: a 100% total and undeveloped land placed in 'Other'.
Common Mistakes to Avoid
- -Leaving undeveloped land out of the percentages
- -Allowing the percentages to total something other than 100%
- -Reporting zoning instead of actual land use
Concept Deep Dive
Analysis
This question tests Fannie Mae's present land use reporting requirements. The land-use percentages must total 100%, and undeveloped land is reported in the 'Other' field. Choose the option that states both rules.
Background Knowledge
The present land use section describes how the neighborhood is actually used, such as one-unit, multifamily, commercial and other. Land uses not listed on the form, such as parkland, are identified with their percentage so the full neighborhood is accounted for.
Real-World Application
An appraiser's neighborhood includes 70% one-unit homes, 10% commercial and a large vacant tract. She reports the vacant tract in 'Other' so the total reaches 100% and comments on the undeveloped land.
More Market Questions
In market area analysis, what characteristic distinguishes a district from a neighborhood?
Under USPAP Standards Rule 1-3(a), which item must an appraiser identify and analyze when necessary for credible results in a market value assignment?
How does the Fannie Mae Selling Guide define a neighborhood?
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Which three categories are used to report the supply of properties in a Fannie Mae neighborhood section?
An appraiser is asked for a retrospective value opinion as of three years ago. When must the appraiser meet the Competency Rule?
Can mixed land uses in a residential neighborhood ever enhance home values, according to Fannie Mae?
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