We have an LTV policy for land development that has a qualifier I cannot find in the regs or lending/appraisal guidance anywhere. If not required, I'd like to eliminate it. It reads:
"Land Development: LTV 75%. This percentage is after discounting requirements under appraisal regulations provided that the amount does not exceed 65% of the projected aggregate value."
Anybody have an idea of where that might have come from?
(I didn't write the policy.)

The supervisory guidelines state the following:

For loans that fund multiple phases of the same real estate project (e.g., a loan for both land development and construction of an office building), the appropriate loan-to-value limit is the limit applicable to the final phase of the project funded by the loan; however, loan disbursements should not exceed actual development or construction outlays.

As such, the initial advance on the raw land should not exceed 65% and then the disbursements should be made based on the progress of the project and not end up exceeding 75% of the final appraised value.

What your policy statement is based on, I have no idea unless you are a State bank and the State regulations address LTV limitations?