7.13.3 Applicable Approaches for "As Is" Value

A. The estimate of “As Is” value of the land and building before rehabilitation should be estimated by the direct market comparison approach and the income approach to value. The “As Is” value by the residual approach is not mandatory but can be used in cases where there is a lack of market sales. This estimate of value assumes an arm’s length transaction between the subject and a typical purchaser of the subject in its current state with respect to condition and income, including the current presence of a subsidized income stream. To determine value based upon the income approach, the appraiser should use the lesser of market rent or the income derived from any rental assistance contract, as applicable, to avoid inappropriately inflating income and thereby the estimate of value. Moreover, the estimate does not assume any advantages or disadvantages associated with the current sale or refinancing of the subject that would involve issuance of tax credits or other development advantages.