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#1967462 - 10/07/14 02:08 PM Multifamily
SouthernBanker Offline
100 Club
Joined: Aug 2011
Posts: 105
Commercial construction loan secured by three 1-4 SFRs and 3 detached garage apartments. All to be used as affordable housing rentals. All of the structures will be located on one continguous plot.

We ordered a residential appraisal report that evalutated one (proposed) structure only.

Does this scenario trigger the appraisal delivery requirements under Reg B? Or is this considered multifamily and exempt?

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Interagency (Reg Z) and CFPB Reg B Appraisal Rules
#1968263 - 10/09/14 12:28 PM Re: Multifamily SouthernBanker
Carolina Blue Offline
Platinum Poster
Carolina Blue
Joined: Jul 2005
Posts: 951
Lost in a regulatory fog
If the buildings are being treated as one apartment complex, then I think they would be exempt based on the below footnote from the discussion section of the final rule. If you're not sure then might as well give the disclosure and copy of appraisal(s).

"79 With respect to the example raised by a creditor and two national creditor associations three four-unit buildings operated as a 12-unit apartment complex, the text of the rule makes clear that a four-unit residential building would be a dwelling, but a 12-unit apartment complex is not. Thus a transaction secured by a four-unit residential building would be covered by the rule, but a transaction secured by the entire 12-unit apartment complex would not be."
Last edited by Carolina Blue; 10/09/14 12:30 PM. Reason: fix quote format
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#1968276 - 10/09/14 01:05 PM Re: Multifamily SouthernBanker
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,346
Cape Cod
A lot of time and energy has been spent on splitting hairs like this one in the Reg B appraisal notice/copy requirement. Ironically, with the waiver provision in the rule, it may just be easier (and less expensive) to give the notice, make the copy and provide it.

I offer this in spite of the fact that I support the answer from Carolina Blue.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

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