SESSION OF 2021
SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2236
As Amended by House Committee on Financial
Institutions and Rural Development

Brief*
HB 2236, as amended, would authorize appraisers to
exclude the sales comparison approach in rural county
mortgage financing appraisals if the property is unique in
style or square footage, or both, and if there exists a lack of
available comparable sales within 30 miles of the property.
The bill would require the appraiser, in the appraisal
report, to provide an explanation of the reasons for exclusion
of the sales comparison approach and require the appraiser
to document the appraiser’s efforts to obtain comparable
sales or market data.
The bill would prohibit a financial institution from
declining to proceed with a mortgage finance transaction due
to exclusion of the sales comparison approach, unless the
approach is required for such mortgage finance transaction
loan to be guaranteed or sold in the secondary market.
The bill would define the following terms:
● “Financial institution” to mean a bank, national
banking association, savings and loan association,
savings bank, trust company, credit union, finance
company, or other lending institution; and
● “Rural county” to mean any county in Kansas with
a population of less than 10,000, using census
data certified to the Secretary of State pursuant to
KSA 11-201.
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
Background
The bill was introduced by the House Committee on
Financial Institutions and Rural Development at the request of
Representative Kelly on behalf of Representative Waymaster.

House Committee on Financial Institutions and Rural
Development
In the House Committee hearing, Representative
Waymaster and the Executive Director of the Kansas
Manufactured Housing Association provided written-only
proponent testimony. The written-only proponents indicated
the bill would address challenges that appraisers in rural
areas have with finding similar properties for comparison to
complete a sales comparison approach. The written-only
proponents further indicated sales comparison issues have
resulted in applicants for mortgages being declined by
financial institutions.
No other testimony was provided.
The House Committee amended the bill to allow
financial institutions to decline to proceed with a mortgage
finance transaction due to the exclusion of the sales
comparison approach if the sales comparison approach is
required for such mortgage finance transaction loan to be
guaranteed or sold in the secondary market.

Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill as introduced, the Kansas Real Estate
Appraisal Board indicates the bill would have no fiscal effect
on its operations.
Appraisal; sales comparison; financial institution; rural; mortgages


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