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ADDENDUM Borrower:Paul E ZenchenkoFile No.:21146 Property Address:3062 Seminole RdCase No.:48-48-6-0535831 City:SilvertonState:ORZip:97381 Lender:Alliance Capital Partners Corp/VA The highest and best use of a site is that reasonable and probable use that supports the highest present value on the effective date of the appraisal. For improvements to represent the highest and best use of a site, they must be legally permitted, be financially feasible, be physically possible, and provide more profit than any other use of the site would generate. All four of these criteria must be met if the improvements are to be considered as the highest and best use of a site. SUPPORT FOR HIGHEST AND BEST USE: This house is well designed and typical of what is selling well in this neighborhood. It does not need any major renovations. Only single family houses are permitted by FT zoning. The neighborhood is comprised of similar style residences and subject is consistent with the typical style in the neighborhood. The subject as improved is a legally permissible use based on its current FT zoning. The lot size, shape, physical condition and land to building ratio allow the present structure and indicate a good utilization of the improvements. Based upon the current market conditions, the present use as a single family residence is its financially feasible and maximally productive use. The highest and best use is its present use. HIGHEST & BEST USE: The highest & best use for the subject is for residential use, as improved. Primary value is attributed the initial building site, since additional site sizes are typically considered "surplus land" and contribute nominal additional value. Additional, subsequent, or hypothetical value that might be obtained from future partitioning or further eventual development is not considered in residential lending or this report. Fannie Mae requirements state: "If the use of comparable sales demonstrates that the improvements are reasonably typical and compatible with market demand for the neighborhood, and the present improvements make the value of the property greater than if the site were vacant, you should consider the existing use as reasonable and report it as the highest & best use. If the present improvements clearly do not represent the highest & best use of the site, Fannie Mae will not purchase or scrutinize the mortgage." Addendum Page 8 of 10