Remaining Economic Life

[Yiu Law]

I was getting ready to make an offer on a foreclosure HUD townhouse, but found out from one of the disclosures that the bank had an appraisal done on the home. One of the statement was

"PER APPRAISER, PROPERTY IS INSURABLE AND MEETS FHA MINIMUM PROPERTY REQUIREMENTS.

Per the appriaser the Remaining Economic Life is less than 30 years, this may affect insurability." 

I have never heard of this economic life phrase before.  I asked my agent and she told me to stay away from the house, there is probably something major with the house.  The fact that it is a townhouse worries me even more.  If one house has structural or foundation issue, wouldn't that adjacent houses have similar issues as well?

I did some research on economic life and why appraisers make that statement and found various results.  Some say that it is just a formula used to calculate depreciation, it has nothing to do with the actual physical life predicted of the house.  The house was built in 1974.

My question is, is it something I should stay away from, or is it just a cookie cutter statement that some appraisers like to put in their report?  Does putting out a statement like this essentially limit the lifespan of the home?  Would it be difficult for me to obtain insurance for the house?

Thanks.