Cost Approach in FHA Appraisals

When is the cost approach required for an FHA appraisal?

The cost approach is required when the subject is a unique property, has specialized improvements, is new manufactured housing (initial sale from manufacturer), or the client requests the Cost Approach be completed. The square foot method is to be used and addressed in the Cost Approach section of the applicable appraisal reporting form.

- Source: HUD FAQ revised 01/24/2013

http://portal.hud.gov/hudportal/documents/huddoc?id=aprval.pdf