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#1926382 - 05/23/14 07:24 PM Development Appraisals
terpsfan Offline
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Joined: Feb 2007
Posts: 2,058
Can we do a loan to develop a subdivision and another loan to construct spec homes once it is developed but wait to do appraisals on the spec homes until they are ready to fund? The second loan will close but we will not fund until after a appraisal is done.Prior to funding each spec home we will get an appraisal. Until an appraisal is done the construction loan will have a $0 balance. We will have an appraisal for the entire tract of land prior to closing the first loan.
Last edited by terpsfan; 05/23/14 07:46 PM.
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#1926466 - 05/24/14 11:53 AM Re: Development Appraisals terpsfan
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
The second loan is an operating line of credit? As long as your loan covenants address the requirements to obtain a draw, then I see nothing wrong with it.
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#1962091 - 09/15/14 09:16 PM Re: Development Appraisals terpsfan
terpsfan Offline
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Would this satisfy the appraisal rules of having an appraisal prior to the credit decision?

When would the appraisal notice and delivery of appraisal need to take place under Reg B?

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#1967121 - 10/06/14 02:50 PM Re: Development Appraisals terpsfan
terpsfan Offline
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Posts: 2,058
Can these operating lines of credit not be done like this anymore?

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#1967145 - 10/06/14 04:00 PM Re: Development Appraisals terpsfan
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
I don't see why not. The line of credit is more of a guidance line and the borrower would still be required to "apply" for each draw. Deliver the notice when they ask for a draw. Deliver the appraisal prior to processing the draw.
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#1967181 - 10/06/14 05:09 PM Re: Development Appraisals terpsfan
terpsfan Offline
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Joined: Feb 2007
Posts: 2,058
That makes since to me. Thanks
Last edited by terpsfan; 10/06/14 05:09 PM.
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