I get that you are trying to do a conventional loan rather than an FHA streamline because you believe you have 20% equity, Navy Fed isn't going to reverse the appraisal so if you want to refinance, you have no option but to get a new lender. Navy Fed isn't the best source for conforming financing anyway so you really should look elsewhere.
Straighten out whether you have a condo or not, then proceed with a new lender and a new appraisal. My offer for assistance still stands.
1: If the original appraisal was a VA appraisal, it will follow you regardless of the lender.
2: If it is recorded @ the county as a condo, then the appraiser needs to go by what the county has the property listed as vs what the owner claims whether it be a condo, manufactured home, stick built 2 unit vs 4 unit etc.
3: An appraiser can and should use smaller comps if they are close to the subject property and recently sold as long as he takes the sq footage /bed/baths into consideration when calculating the comparison approach (they will add value to the appraisal for more sq footage, added features, better condition etc and remove value for less bathrooms, deferred maintenance, etc to come up with the value of the home compared to neighboring recent closings).
4: Appraisers weigh more on recent sales and close vicinity for comparison vs size due to the volatility of prices and the ability to compensate for sq footage bed/bath discrepancies in calculation.
***If you truly believe it is a SFR detached there may be a way to take it up with the county, but I'm pretty confident that their records would be straight from the builders' permits which once stamped by the planning dept pretty much seal the fate of the property type forever.
Here is what you need. You need your lender to make a better case as to why they appraiser needs to adjust the value.
Now if you are trying for a conforming mortgage you could get a new appraiser from a new lender.
You're correct to expect some appreciation year-over-year. In your zip code condo's have increased approximately $45 per square foot on average, or about an 8.7% increase. With the limited inventory in your zip code, I'd think you'd benefit from having another less conservative lender take a look. Please reach out to me for a reputable referral!
A couple quick answers for you:
a) An appraisers hands are tied when working with condo's. Even if it is a detached condo, it goes on a separate form, and they have to be appraised with other condo's. I am not saying that the appraiser is correct, but that is the reality.
b) Navy Fed isnt really that good. They are definitely not going to fight for your value. I am a former Marine, use Navy fed for banking, but in the mortgage arena they are not great.
The other option that you DEFINITELY have is to see if you qualify for a HARP refinance. HARP refinances require no appraisal, and I can see if you qualify in about 2 minutes... Rates are the same as typical conventional. The only difference is that the appraisal is waived... Rate/Term only, no cash out allowed obviously...
Give me a call or shoot me an email and I can take care of you, or shoot you in the right direction...
But do it before this debt ceiling thing gets out of hand...
Talk to you soon,
WJ Bradley Mortgage Capital
There are all kinds of properties in the wrong zone. Go to your city and see if they have it listed as a condo. If you not get a letter from them saying that. The lender will also need a "rebuild letter" which says if the house burns down they will allow you to rebuild the house and not a condo.
By the way FHA appraisals attach to the property as well.
Let me know if I can help, I'd be happy to do the analysis for you.