Section 430. Purchase supplement payment computation

A. Method.

1. The probable selling price of a comparable dwelling will be determined by the district office by analyzing at least three dwellings from the inventory of available housing, Library Form RW-69B, which are available on the private market and which meet the criteria of a comparable replacement dwelling. Less than three comparables may be used for this determination when fewer comparable dwellings are available. The relocation agent performing the determination must provide a full explanation supporting the determination, including a discussion of efforts to locate more than one comparable. One comparable, from among those evaluated and considered, will be selected as the basis for the purchase supplement determination. The selection will be made by careful consideration of all factors in the dwellings being considered which affect the needs of the displacee with reference to the elements in the definition of comparable replacement housing.

Refer to the "Guidance Document for Determination of Certain Financial Benefits for Displacees," effective October 1, 2014, for a step-by-step summary of the determination process, and an example of the purchase supplement payment computation.

2. If comparable decent, safe and sanitary housing cannot be located, after a diligent search of the market, available non-decent, safe and sanitary replacement dwellings may be used as the basis for the maximum amount of the purchase supplement. In these cases, the maximum payment will be established by obtaining cost estimates from persons qualified to correct the decent, safe and sanitary deficiencies and adding this amount to the probable selling price of the available replacement housing.

A displacee will not be required to vacate the displacement dwelling until decent, safe and sanitary housing has been made available.

B. Major exterior attributes. When the dwelling selected in computing the payment is similar, except it lacks major exterior attributes present at the displacement property such as a garage, outbuilding, swimming pool, etc., the appraised value of such items will be deducted from the acquisition cost of the acquired dwelling for purposes of computing the payment. No exterior attributes are to be added to the comparable. However, the added cost of actually building an exterior attribute at the replacement property occupied, may be added to the acquisition cost provided major exterior attributes having the same function are found in the displacement property and in the comparable used to determine the maximum payment.

The following calculation shows how a purchase supplement is determined when a major exterior attribute is present:

	Example Major Exterior Attribute (swimming pool)
	The appraiser assigned $5,000 contributing value for the pool, and a total property value of $100,000. A comparable house, not having a pool, is listed for sale at $105,000. After a 3.0% adjustment, a probable selling price of $101,850 is determined for the comparable property. The purchase supplement amount is computed below:
	Comparable Dwelling (adjusted)	$101,850
	Less:
	Displacement property value	$100,000
	Less value of the pool	$5,000
	Adjusted displacement property value	$95,000
	Purchase Supplement Amount	$6,850

C. Comparable housing not available.

1. In the absence of available comparable housing upon which to compute the maximum replacement housing payment, the district office may establish the estimated selling price of a new comparable decent, safe and sanitary dwelling on a typical home site. To accomplish this, the district office will contact at least two reputable home builders for the purpose of obtaining firm commitments for the cost of building a comparable dwelling on a typical home site.

2. If the only housing available greatly exceeds comparable standards, a payment determination may be based on estimated construction cost of a new dwelling that meets, but does not exceed, comparable standards.

Historical Notes

Derived from Volume 18, Issue 03, eff. November 21, 2001; amended, Virginia Register Volume 21, Issue 13, eff. April 6, 2005; Volume 22, Issue 21, eff. July 26, 2006; Volume 30, Issue 26, eff. October 1, 2014.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.; 49 CFR Part 24.