Appraisal Question

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    On an appraisal for a residential construction loan I was reviewing, I noticed the appraiser did not list the “as is” value. the appraiser listed the value “after construction”? Should we or do we need a value of what the property is at the time of the appraisal? And also the value after construction?


    For compliance with the Interagency Appraisal and Evaluation Guidelines, the report should include an “As Is” value on the effective date of the report if this is an in-house transaction (secondary market appraisals are exempt from this). If this is a proposed construction and the report includes a completed Cost Approach, the Site Value indicated should suffice as the “As Is” value if construction has not started and the site is still vacant as of the effective date. There is no need to ask the appraiser to adjust the report to note this to be an “As Is” value if the site is vacant. However, if there are any other improvements (an existing barn, for example) or if construction has already begun, then the Site Value may not be sufficicent and the report needs to address what the “As Is” value is on the effective date along with a summary of support for that value.


    You might want to check out the upcoming webinar Eric will be doing for us on “Real Estate Appraisal Program Updates and Surviving the Safety and Soundness Exam”.

    You can find more info and register here:

    • This reply was modified 2 years, 1 month ago by rcooper. Reason: typos

    I have a loan in the amount of $44,000 on 4 residential lots and will be written for 12 months (temporary loan). The four lots are worth $12,000 apiece. There are exemptions in Dodd-Frank on not needing to have an appraisal. One exemption is TEMORARY BRIDGE LOAN (FOR TWELVE MONTHS OR LESS). Does that mean no appraisal OR evaluation needs to be completed?


    Thanks for the question. I believe we already answered in a different forum: If you need further clarification please let us know.

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