405.02: Actual and Effective Ages

We do not place a restriction on the actual age of the dwellings.  Consequently, a mortgage secured by an older dwelling that meets our general requirements is acceptable.  The improvements for all properties must be of the quality and condition that will be acceptable to typical purchasers in the subject market area.

The relationship between the actual and effective ages of the property is a good indication of its condition.  A property that has been well maintained will generally have an effective age somewhat lower than its actual age.  On the other hand, a property that has an effective age higher than its actual age probably has not been well maintained or may have a particular physical problem.  In such cases, the lender should pay particular attention to the condition of the subject property in its review of any appraisal report that requires the appraiser to address the actual and effective ages of a property.