310: Properties in Special Assessment or Community Facilities

Alternative methods for raising the capital necessary to satisfy utility and infrastructure requirements are sometimes used in the development of new residential communities.  Generally, this involves the creation of local districts -- special assessment districts or community facilities districts -- that have the authority to assess homeowners for the cost of developing utility services and various infrastructure facilities (roads, sewer services, schools, police and fire protection services, libraries, etc.).  We expect the lender to know whether or not a property is located in one of these districts and to be aware of the effect that assessments levied by the district could have on property values and the marketability of the subject property.  The lender's appraiser, therefore, must give special consideration to the valuation of properties located in these districts.