What does the “built-up” percentage in the neighborhood section of a Fannie Mae report measure?
Correct Answer
C) The percentage of available land that is improved
The degree of development, reported as “built-up,” is the percentage of the available land in the neighborhood that has been improved. It may indicate whether a property is residential in nature.
Why This Is the Correct Answer
Option C is correct because the degree of development, referred to as built-up on the appraisal report forms, is the percentage of the available land in the neighborhood that has been improved. It shows how fully developed the neighborhood is. This can help indicate whether a property is residential in nature.
Why the Other Options Are Wrong
Option A: The percentage of homes built in the last ten years
Option A, the percentage of homes built in the last ten years, describes the age of the housing stock, not how much of the available land has been improved.
Option B: The percentage of homes that have had additions
Option B, the percentage of homes that have had additions, measures remodeling activity, not the share of available land that has been developed.
Option D: The percentage of lots that were sold to builders
Option D, the percentage of lots that were sold to builders, measures lot sales activity; sold lots may still be vacant, so it does not measure improved land.
Built-up means land used
Built-up asks how much of the available land already has improvements on it.
How to use: Use this to reject choices about home age, additions or lot sales.
Exam Tip
Built-up measures the share of available land that is improved, not the age or condition of the homes.
Common Mistakes to Avoid
- -Thinking built-up refers to new construction
- -Counting sold lots as improved land
- -Confusing built-up with growth rate
Concept Deep Dive
Analysis
This question tests the meaning of the built-up checkbox in the neighborhood section of Fannie Mae reports. Built-up describes the degree of development, measured by how much of the available land in the neighborhood has been improved. It is not about the age of homes, additions or lot sales.
Background Knowledge
The neighborhood section of Fannie Mae appraisal reports includes characteristics such as location, built-up, growth, property values, demand and supply, and marketing time. Built-up is reported in ranges and describes the degree of development. It helps the reader understand the neighborhood's character and stage of development.
Real-World Application
An appraiser working in a growing suburban area observes that many lots in the neighborhood remain vacant. The appraiser checks the appropriate built-up range on the report to show that only part of the available land has been developed.
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