On non-consumer construction loans, can the Bank order an appraisal?

Why wouldn't you be able to order an appraisal?

I'm sorry I got further clarification. Can the Bank pick the appraiser?

Bank's are the only one that can pick the appraiser on any loan. Same with who in the bank picks the appraiser, they have to be independent of the credit process. I guess I still don't understand the context of your question.

We have list of 15 board approved appraisers that we use for consumer real estate. A senior manager would like to limit that list two only 2 or 3 select appraisers for non-consumer construction purpose. Is there any regulatory reason why this could not be done?

First question is why? Is it related to the fact that only a limited number of your appraisers in the area have the expertise to perform such appraisals? If you are talking residential construction, what difference does it make who the borrower might be (consumer/commercial)? The guidelines make no such differentiation. If by Senior Manager you mean someone from within the credit process - he really doesn't get a say in the matter. If you make such a change, it better be going to the board of directors.

From the guidelines:

A. Approved Appraiser List

If an institution establishes an approved appraiser list for selecting an appraiser for a particular assignment, the institution should have appropriate procedures for the development and administration of the list. These procedures should include a process for qualifying an appraiser for initial placement on the list, as well as periodic monitoring of the appraiser's performance and credentials to assess whether to retain the appraiser on the list. Further, there should be periodic internal review of the use of the approved appraiser list to confirm that appropriate procedures and controls exist to ensure independence in the development, administration, and maintenance of the list. For residential transactions, loan production staff can use a revolving, pre-approved appraiser list, provided the development and maintenance of the list is not under their control.

IV. Appraisal and Evaluation Program

An institution's board of directors or its designated committee is responsible for adopting and reviewing policies and procedures that establish an effective real estate appraisal and evaluation program.

Thanks for your help.