Markdown_files/FHA handbook/page_847.md

## II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT

### D. Appraiser and Property Requirements for Title If Forward and Reverse Mortgages

#### 3. Acceptable Reporting Forms and Protocols (04/10/2025)

##### (3) Required Analysis and Reporting

The Appraiser must identify any Encroachments of the subject’s dwelling, garage, or other improvement onto an adjacent Property, right-of-way, utility Easement, or building restriction line. The Appraiser must also identify any Encroachments of a neighboring dwelling, garage, other physical Structure or improvements onto the subject Property.

The Appraiser must notify the Mortgagee if, upon observation, it appears that an Encroachment affects the subject Property.

### (E) Easements and Deed Restrictions

#### (1) Definition

An Easement refers to an interest in land owned by another person, consisting of the right to use or control the land, or an area above or below it, for a specific limited purpose.

A Deed Restriction refers to a private agreement that restricts the use of real estate in some way, and is listed in the deed.

#### (2) Standard

The Appraiser must note the presence of any Easements and Deed Restrictions to assist the Mortgagee in determining eligibility.

#### (3) Required Analysis and Reporting

The Appraiser must analyze and report the effect that Easements and other legal restrictions, such as Deed Restrictions, may have on the use, value and marketability of the Property. The Appraiser must review recorded subdivision plats when available through the normal course of business.

### iii. Externalities

#### (A) Definition

Externalities refer to off-site conditions that affect a Property’s value.

#### (B) Standard

The Appraiser must report the presence of Externalities so that the Mortgagee can determine eligibility.

**Handbook 4000.1 824**  
**Last Revised: 01/10/2025**