Underwriters, do you know the “Q” codes?

Written By: Glenn Michaels, Op-Ed Writer

Appraiser’s when completing an appraisal report now place on every appraisal report the “Quality Ratings” on every appraisal report.

These ratings are numbered after the “Q”. They can be from Q1 through Q6. The underwriter should make notice of the Quality Rating as well as the Condition Rating (C1 – C6)

The “Q” codes are below:

Q!: Dwellings with this quality code are usually unique structures that are individually designed by an architect for a specified user. Such residences typically are constructed from detailed architectural plans and specifications and feature an exceptionally high level of workmanship and exceptionally high grade materials throughout the interior and exterior of the structure. The design features exceptionally high quality exterior refinements and ornamentation, and exceptionally high quality interior refinements. The workmanship, materials, and finishes throughout the dwelling are of exceptionally high quality.

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Q2: Dwellings with this quality rating are often custom designed for construction designed for construction on an individual property owner’s site. However, dwellings this quality grade are found in high quality tract developments featuring residences constructed from individual plans  or from highly modified  or upgraded plans. The design features detailed, high quality exterior ornamentation, high quality interior refinement, and detail. The workmanship, materials, and finishes throughout the dwelling are generally of high or very high quality.

Q3:  Dweelings with this quality rating are residences of higher quality built from individual or readily available designer plans in above standard residential tract developments or on an individual property owner’s site. The design includes significant exterior or ornamentation and interiors that are well finished. The workmanship exceeds acceptable standards and many materials, and finishes throughout the dwelling have been upgraded from “stock” standards’.

Q4:  Dwellings with this quality rating meet or exceed the requirements of applicable building codes . Standard or modified standard building plans are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Materials, workmanship, finished and equipment are of stock or builder grade and may feature some upgrades.

Q5: Dwellings with this quality rating feature economy of construction and basic functionality as main considerations.  Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades.

Q6: Dwellings with this quality  rating are of basic quality and lower costs, some may not be suitable for year round occupancy. Such dwellings are often built with simple plans or without plans, often utilizing the lowest quality building materials. Such dwellings are often built or expanded by persons are professionally unskilled or or possesses only minimal construction skills. Electrical, plumbing, and other mechanical systems and equipment may be minimal or non – existant. Older dwellings may feature one or more substandard or non – existing. Older dwellings may feature one or more substandard or non – conforming additions to the original structure.

Appraisal reports with a Q6 rating need more examination and review before accepting the appraisal report.

About The Author
Glenn Michaels - As an NAMP® Opinion Editorial Contributor, Glenn Michaels is a mortgage underwriting instructor for CampusUnderwriter (www.MortgageUnderwriter.org). As a BBA & FHA DE Underwriter, Glenn is a Pace University graduate who also graduated from New York University’s School of Mortgage Finance. Glenn has conducted numerous training classes and has worked in the mortgage banking industry for 38 years. 

Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.