Hello, We have a new loan request in which the funds will be used to purchase a commercial building, we are taking a mortgage on another property also to cover the down payment. The 2nd piece of property is being used as an abundance of caution, loan amount is over appraisal threshold. We are getting an appraisal on the purchase property, however do we also need to get one on the 2nd property if were taking it as "abundance of caution"? I am going down the road of we need one, i just wanted to confirm yes or no. TIA

First question is, could you make this loan under your existing policies without the 2nd piece of property? If the answer to that is yes, then you do not need an evaluation or appraisal. If the answer is no, then it would not be exempt from your evaluation/appraisal policy.

So no we can't we are taking the equity in the property to cover the down payment and value is not sufficient. So say even if we want to make a policy exception, can we, if loan amount is above the $450,000 appraisal requirement threshold? Sorry for any confusion.

Read: Abundance of Caution - bottom of Page 24

https://www.fdic.gov/news/financial-institution-letters/2010/fil10082a.pdf