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#2225737 - 11/15/19 09:10 PM $400,000 appraisal threshold
Red Raiders Offline
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Compliance Land
We have an LLC that owns a 1-4 property we will be doing a loan on. If the loan amount is over $400,000 we have to have an appraisal by a state certified or licensed appraiser, right?

Does loan purpose or individual borrower vs entity borrower matter? I didn't think so but I wanted to double check.
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#2225743 - 11/15/19 09:48 PM Re: $400,000 appraisal threshold Red Raiders
rlcarey Offline
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Galveston, TX
The final rule increases the threshold level at or below which appraisals are not required for residential real estate transactions from $250,000 to $400,000. The final rule defines a residential real estate transaction as a real estate-related financial transaction that is secured by a single 1-to-4 family residential property.

Purpose or borrower is not a consideration
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#2225744 - 11/15/19 09:53 PM Re: $400,000 appraisal threshold Red Raiders
Red Raiders Offline
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Compliance Land
Thanks, Randy. The LO thought since this was a business-purpose loan to an LLC that it would $500,000 before we would have to get an appraisal.
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#2225746 - 11/15/19 11:00 PM Re: $400,000 appraisal threshold Red Raiders
Adam Witmer Offline
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The easiest way to explain this is:

A single 1-4 family residential property = $400,000 threshold.
Anything else = $500,000 threshold.

As Randy said, the loan purpose doesn't matter as the definitions are different in the appraisal threshold rules than what they are in Regulation Z.
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