Commercial Appraisal Notice for Builder

The Bank is about to provide an advance to a Builder on a revolving line of credit for 100 lots under a guidance line of credit to a Builder. This will be a lump sum advance. Over a period of time, the Bank will provide additional advances on the line for the construction of the houses, and we will get an in-house appraisal conducted at the time of the additional advances. The Bank will get one outside appraisal conduced on one of the houses, and use this as a guide for all other in-house appraisals. The Builder usually start 5 to 10 houses at a time, so the initial advance of will slowly be repaid. The lots are already secured by a 1st lien

Under Reg. B, is it possible to get a single “Appraisal Notice” and one “Appraisal Acknowledgement and Waiver of Delivery Timing Requirement” signed at the time of the initial lot take down (the 5 to 10 houses being constructed), if we list all of the lots on each document?

Thank you

THe first thing you need to figure out is when you have an application and what is it for. Whether an entity has a guidance line approved is usually an internal function and is not a granting of credit.

Randy thanks, I'll have to verify the application From the information I received, there was a guidance line approved by the Board for a lump sum with a mortgage. This is different from the Bank's usual guidance line for builders with separate applications and notes for one request at a time. Here, the Bank has an approved guidance line of credit for draws to build 5-10 residential dwellings per draw.

Well, you are using the term "guidance line" which is not defined. In my banking history, a borrower was internally approved for a guidance line. The borrower was still required to submit an application for a loan within that guidance line. It just did not need to go back through any approval process as long as the amount of credit remained under the approved guidance line.

So, it is really going to come down to your process.

Randy, thanks again, I verified with management it's not a guidance line, but an approved Revolving Line of Credit. I'll review the Bank's procedures.