Appraisals and Equity Lines

3 Replies

Hello BP!

My first post, go easy on me...

I own a Duplex In the bay area that has an attached ADU (accessory dwelling unit) or granny unit. Not legal as far as the city is concerned.

For all intensive purposes it could be considered a triplex but needs to appraise as a duplex. I have lived in the ADU sense purchase in 2014 and have two leases with great tenants. Approx $4500 per mo income, $3450 PITI and I live there!

Ive started the HELOC process and traditionally my main hurdle when borrowing is income, schedule C with a bit of sch E. Lots of write-offs.

The appraiser was an investor as well and understood exactly what I was trying to accomplish. There are NO comps for a property like this in the area, so he used the rental income method. He did a great job and really gave me a gift of an appraisal at $850k. I had originally thought that the place would go for $950-1mil then I remembered everyone thinks their property is worth more than it really is. Very happy with $850 and I don't know if i'll get that kind of value again.

The appraisal made it to the bank where it was under review for quite a while. The bank contacted the appraiser and asked to provide recently sold comps and the appraiser simply explained that there was none.

The bank then noticed that the appraisal had the 'Tenant Occupied' box checked only. REJECTED...

I contacted the appraiser (who is really nice) and he told me to have the bank kick it back to him with a occupancy inquiry. He'll then check both boxes, tennant occupy/Owner occupy.

Before I contacted my loan officer I decided to look at my refi appraisal from 2014. Both boxes were checked. This was a fannie/freddie conforming loan for $500k. Ive provided my old appraisal as well as the email from my current appraiser saying he would be happy to change it.

It seems like my loan officer could care less. He says he provided the information but the bank does not seem to care.

I have wasted 3 months and a hard credit inquary. I am very irritable....

A few questions; I believe there is a 5% chance that this loan is not yet dead. I would like to salvage if possible.

- As a borrower can I appeal my appraisal? Can I do the part my LO and bank are failing to do, and simply have the appraiser resubmit?

- Anyone have any other ideas?

- Does anyone know of an equity line lender that is up for a challenge? Any luck with a specific bank?

Thanks so much for your time!

Matt

@Matthew Noble

I am sorry to hear about your lending issues, this sort of stuff is incredibly frustrating. You can absolutely challenge/appeal your appraisal, although bottom line, the bank makes the call on whether or not they want to push your equity line through. 

Who are you going through for your line of credit? In my experience, working with the larger banks has always been hard so I usually try and work with a credit union or small/local bank who really understands our area - this is key.  

I have a similar propery to yours and the appraisal and HELOC I got for mine (in the last 6 months) was no problem, however I had an excellent, local loan officer who really went to bat for me. I will PM you his details.

This is also a great thread for @Chris Mason

Originally posted by @Jonathan Pflueger :

@Matthew Noble

I am sorry to hear about your lending issues, this sort of stuff is incredibly frustrating. You can absolutely challenge/appeal your appraisal, although bottom line, the bank makes the call on whether or not they want to push your equity line through. 

Who are you going through for your line of credit? In my experience, working with the larger banks has always been hard so I usually try and work with a credit union or small/local bank who really understands our area - this is key.  

I have a similar propery to yours and the appraisal and HELOC I got for mine (in the last 6 months) was no problem, however I had an excellent, local loan officer who really went to bat for me. I will PM you his details.

This is also a great thread for @Chris Mason. 

 Matt actually works with a colleague that sits 10 feet away from me for his Fannie/Freddie stuff (we don't do HELOCs directly, except for 80/10/10), and has probably seen me in passing while in the office. :) 

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