Renovation and construction appraisals

Subject-to valuation for renovation and construction lending

Renovation and construction loans run under different programs, but the valuation work is one discipline: an opinion of value for a property as it will be, supported by documented plans for work not yet done.

RCA appraisers work mainly on these assignments.

The same competencies, whether the work is a renovation or a ground-up build

01

Specifications of repairs

Interpreting line-item scopes of work and reconciling them with the property as it currently stands.

02

Contractor bids

Reading bids against the specifications to establish exactly what the finished property will include.

03

Architectural and engineering drawings

Working from plans, elevations, and structural documents to determine finished layout, living area, and construction quality.

04

Zoning and variance issues

Recognizing when proposed work depends on a zoning variance and addressing it in the report.

05

Living area and layout

Measuring the contribution of added or reconfigured square footage. The same bedroom and bath count at a different GLA supports a different value.

06

As-completed opinions of value

Developing and supporting a value conclusion for the property as it will exist once the documented work is complete.

Renovation and construction appraisals

The agencies treat renovation and construction as separate program categories, each with its own guidelines. RCA appraisers work within the requirements of each program.
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Renovation lending

Existing properties financed together with a documented scope of repairs or improvements, valued as repaired.

Programs served

Fannie Mae HomeStyle · Freddie Mac Choice · other renovation & new construction programs

Documents Reviewed

Specification of repairs · Contractor bids · Consultant reports

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Construction lending

New homes financed from plans and specifications, valued as completed before construction begins.

Loan types

Construction-to-permanent · Land-plus-build · Custom homes

Assignment focus

Plans-and-specs review · New construction comparable selection · Limited-comparable markets

Built to avoid common delays

Where subject-to assignments go wrong, and how RCA prevents it.

The Issue

Conditions already covered by the specifications

RCA appraisers read the full specification of repairs before adding conditions, so reports do not call for work the scope already includes.

The Issue

Avoidable revisions

Every report receives an internal review for completeness and consistency with program guidelines and the submitted documentation before delivery.

The Issue

Slow communication

Lender staff receive timely responses, through appropriate channels, when questions or revision requests arise.