We have a situation in which the appraisal fee on the GFE was for a residential appraisal. However, the building is not only the borrower's primary residence, it also has their business in the front. The appraiser did a commercial appraisal, which doubled the price of the fee. The lender found out after the GFE was done that the borrower's income, to repay the loan, comes from that business.
I'm not sure the income source makes any difference in this case. Would the knowledge of the building coming after the GFE make a difference?
Can we do a changed circumstance GFE?

So the LO knew at application that the building was both their residence and business location, correct?
Then I really don't see how you could justify a changed circumstance for this.
Did you request a commercial appraisal or ask the appraiser to include the business in the appraisal or was this something he took upon himself to do?
If what you got is not what you requested and/or need, then have the appraiser correct it and lower their fee.

I have since found out that the home is separate from the commercial building, but on the same land. The LO new this was the case at time of application. However, he did not know that the business was their primary income until later. This is when he had to order a commercial appraisal.

What is the collateral? If it's both the home and the business, you need an appraisal on each and that appears to have been known at application, therefore no COC.

I don't see the point in needing a commercial appraisal for income verification unless it's an income-producing building (ie, renting the building out).

This situation isn't making much sense to me.

The home and business are on the same parcel of ground. I did not think a change in circumstance would fly on this one, but it always helps to get other's opinions.
Thanks

TCee, could you please clarify why this needed a commercial appraisal too? Doesn't happen often that RR and I are both a bit flummoxed, so we'd appreciate you filling in the blanks.
Thanks.