“In some of your appraisal reports, either the subject property or a comparable sale was described as C1 for condition rating when the property in question was 2 years or older. Hence, it appears that either the C1 rating is inappropriate, or the age of the property has been misreported.
A property that is two or more years old is likely to have some degree of physical depreciation. The definition of a C1 property from Appendix 36 of the Freddie Mac Seller/Servicer Guide is as follows:
C1: The improvements have been recently constructed and have not been previously occupied. The entire structure and all components are new, and the dwelling features no physical depreciation.
Note: Newly constructed improvements that feature recycled or previously used materials and/or components can be considered new dwellings provided that the dwelling is placed on a 100 percent new foundation and the recycled materials and the recycled components have been rehabilitated/remanufactured into like-new condition. Improvements that have not been previously occupied are not considered “new” if they have any significant physical depreciation (that is, newly constructed dwellings that have been vacant for an extended period of time without adequate maintenance or upkeep).
Hence, for a property to have a C1 condition rating, it must meet all three of the following conditions:
1. it must be newly constructed;
2. it must not be occupied or previously occupied; and
3. there must be no physical depreciation.”
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