Under Fannie Mae’s UAD condition descriptions, which C1/C6 distinction is correct?
Correct Answer
D) C1 is new, unoccupied construction; C6 has severe safety or structural defects
C1 describes very recently constructed, previously unoccupied improvements without physical depreciation, subject to the stated definition’s material provisions. C6 involves damage or deferred maintenance severe enough to affect safety, soundness or structural integrity and requires substantial rehabilitation. These are absolute condition descriptions, not neighborhood-relative rankings. Condition grades themselves do not define fixed dollar adjustments.
Why This Is the Correct Answer
Option D is correct because C1 describes very recently constructed improvements that have not previously been occupied and show no physical depreciation. C6 describes substantial damage or deferred maintenance severe enough to affect the safety, soundness or structural integrity of the improvements.
Why the Other Options Are Wrong
Option A: C1 means severe unsafe damage, while C6 means new, unoccupied improvements
Option A says C1 means severe unsafe damage while C6 means new, unoccupied improvements. This reverses the scale: C1 is new and unoccupied, and C6 is severe damage.
Option B: Both are interchangeable rankings judged relative to the nearby houses
Option B claims both are interchangeable rankings judged relative to nearby houses. They are distinct, absolute condition descriptions with opposite meanings, not neighborhood-relative rankings.
Option C: C6 identifies only new speculative houses awaiting their first listing
Option C says C6 identifies only new speculative houses awaiting their first listing. New, unoccupied construction is C1; C6 is reserved for improvements with severe defects affecting safety, soundness or structural integrity.
One is new, six is severe
C1 sits at the top like a brand-new house; C6 sits at the bottom with severe safety or structural problems. The number climbs as condition declines.
How to use: Use this to keep the direction of the UAD condition scale straight.
Exam Tip
Watch for choices that swap the ends of the scale or describe the ratings as relative to the neighborhood.
Common Mistakes to Avoid
- -Reversing C1 and C6
- -Rating condition relative to neighboring homes instead of by the definitions
- -Treating a condition rating as a fixed dollar adjustment
Concept Deep Dive
Analysis
This question tests knowledge of Fannie Mae's UAD condition ratings at the two extremes. C1 is the top of the scale and C6 is the bottom. The ratings are absolute descriptions, not rankings relative to neighboring houses.
Background Knowledge
The UAD condition ratings run from C1 (new, never occupied, no physical depreciation) to C6 (severe damage affecting safety, soundness or structure). Each rating has a defined meaning that applies regardless of what neighboring homes look like. The ratings describe condition; they do not by themselves set dollar adjustments.
Real-World Application
An appraiser inspects a newly built home that has never been occupied and rates it C1. Later that week, the appraiser inspects a fire-damaged house with compromised framing and rates it C6, noting the need for substantial repairs.
More Sales Comparison Questions
Supported adjustments are: non-market financing $10,000, GLA $36/sf, garage $3,500 per car, pool/spa $12,500. A comparable identical to the 2,800 sf subject sold for $267,000 with non-market financing. What is its adjusted price?
Using GLA $36/sf and non-market financing $10,000: a 3,100 sf comparable sold for $277,000 with non-market financing; the subject has 2,800 sf. Bath count differences are not adjusted. What is the adjusted price?
Using garage $3,500 per car and pool/spa $12,500: a comparable with a 2-car garage and a pool/spa sold for $268,000. The subject has a 3-car garage and no pool. What is the adjusted price?
Using GLA $36/sf, garage $3,500 per car and pool/spa $12,500: a 2,600 sf comparable with a 2-car garage and a pool/spa sold for $264,000. The subject is 2,800 sf with a 3-car garage and no pool. What is the adjusted price?
In a neighborhood with declining values and marketing times over six months, what must Fannie Mae lenders confirm about the sales comparison analysis?
A house is a 4,000 square foot home in an area of 2,000 square foot homes. How must the appraiser treat this over-improvement in the sales comparison grid?
According to the Interagency Appraisal and Evaluation Guidelines, which items should an appraisal’s market conditions discussion include?
A comparable listed at $420,000 and sold for $399,000. What sale-to-list price ratio (sale price ÷ list price) does this indicate?
An appraiser wants to describe the neighborhood boundaries in a Fannie Mae report. Which approach is acceptable?
Which of these is listed by Fannie Mae as a sales or financing concession?
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Three relevant pool pairs indicate $14,500, $16,200 and $13,800. What is the most defensible way to use this evidence?
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A verified pair of cash-equivalent sales in the same market has the superior covered front porch at $582,000 and a matched property lacking it at $558,000. Rights, terms, time and other material characteristics are matched. A suitable comparable sold for $570,000. The subject is inferior in this same feature; the comparable is superior. Assume the observed contribution applies and no other adjustments. What signed covered front porch adjustment and adjusted comparable price result?