We have several existing commercial real estate loans for one customer and a State Certified Appraisal was performed on the property (resort). The customer wants to consolidate a loan from another financial institution with us. We would use the real estate as collateral. Will our existing apraisal suffice if the market conditions have not changed and the amount of the appraisal is more than sufficient to cover the new money?

As in taking a second lien for the new loan?

We have a first lien on the real estate securing our loans. The mortgage that we have already filed allows multiple advances so we would actually use the existing mortgage as collateral for this "new loan".

28. Can a regulated institution advance new funds without a new appraisal if the value of the total loan continues to be supported by an existing appraisal and is consistent with supervisory LTV limits? Does the age of the appraisal matter if the physical condition of the property and the market conditions have not changed?

Answer: A regulated institution may use an existing appraisal or evaluation to support a subsequent transaction, as long as the credit file documents the facts and analysis that support the institution's conclusion that the appraisal or evaluation remains valid. Criteria for determining whether an existing appraisal or evaluation remains valid will vary depending upon the condition of the property and the marketplace and the nature of any subsequent transaction.

Using an existing appraisal is permitted.

LS's comments above need emphasis on "VALID" as current real estate markets regulatorily are driving for updated appraisals whenever there is a hint of a declining market.

To clarify, those are not my comments. They are from FDIC.

Thanks for the comments.