We are refinancing a loan secured by 16 condo units all located in the same condo development. Each unit is exactly the same-same sq ft-same floor plan, etc. Can we obtain an appraisal on one unit and make an assumption as to the value of the other 15 units? If not, what are my other options? Additional Note: The total loan amount is $343,000 and each unit was previously appraised for about $50,000.

I think that is hard to say. Who's to say that some units might face the parking lot while some face the beach, for instance. I would want it on the entire complex. Besides, you likely have common ammenities to consider too.

The loan officer has visited the property. All units face the street, no better view than any other. He indicated that the only difference he noted is that a fence and gate has been added to one section of the property. Otherwise, everything is the same.

I'm with Joker; I want to see the value of the complex. There's a difference in owning one condo versus owning 16 as a set. The appraisal should also consider the financial impact of the timeline for selling them or the multi family rental income depending upon how your borrower is using the property. Either use will be a factor in the overall value.

Cornfed presents an even bigger picture as to why you need to consider the entire complex vs one unit. These are very important points!

I just found something in the FDIC FIL-90-2005. Its regarding tract development (construction) but I maybe it would also apply to refinancing. Question # 12 -

What are the appraisal requirements when an institution finances construction of a condominium building(s)?
Answer: For a condominium building with five or more units, an institution must obtain an appraisal of the building that reflects appropriate deductions and discounts for holding costs, marketing costs, and entrepreneurial profit. An institution may not use the aggregate retail sales prices of the individual units as the market value to calculate the LTV ratio. For purposes of this document, condominium buildings are distinguished from other types of residential properties if construction of the entire building has to be completed before any one unit is occupied.

[u]If an institution finances the construction of a single condominium building with less than five units or a condominium project with multiple buildings (e.g., clustered condominiums and town homes) with less than five units in a building, the institution may be able to rely on appraisals of the individual units to satisfy the agencies' appraisal requirements and to determine the market value for calculating the LTV ratio. In this regard, the institution should be able to control starts on an individual building basis and demonstrate by a feasibility or market analysis, conducted independently of the borrower and loan production staff, that all units in each building can be constructed and sold within 12 months.

It looks like 5 or more units-bulk appraisal with deductions and discounts...less than five units-may be able to rely on appraisals of the individual units.

But cannot obtain an appraisal for one condo take that value and multiply by 16 condos.

Right?

I would think that wouldn't apply as it doesn't appear that you are financing the construction. The earlier advise you were given by Cornfed is still the strongst.

Thanks for all the help!

Just a tack on comment...we refinanced a set of condo units last fall with 40 units - 8 units per building and 5 total buildings. There were two floor plans. The appraiser appraised one each of the floor plan and then inspected each condo unit to check for adverse conditions. This way we had an individual condo appraisal in the event it was needed down the line. The appraiser also appraised the complex as a whole. The all inclusive appraised value was lower than taking the individual appraisals x 40.

We wanted the individual appraisals as many complexes in that area of the city are turning into individually owned condos in place of rental/investment properties.

The complex owner(s) approached us last month for permission to start selling them off one at a time.