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APPRAISAL GUIDELINES
SBA now requires the appraisal to be addressed to both the Third Party Lender
AND to the SBA.

When issuing your appraisal engagement letter, please instruct the appraiser to include the U.S. Small Business Administration as an authorized user of the report.

PLEASE NOTE: Value must be based on Fee Simple (not Leased Fee)

If building improvements are involved with this project, please provide the contractor’s bid to the appraiser, and have the appraiser provide three values in his report:

    1) market value on an as-is basis for land only;
    2) market value on an as-is basis for land & building; and
    3) market value of land & building at the completion of improvements.

Lastly, please instruct the appraiser to use at least 2 of the 3 appraisal methods (cost, sales, and income approaches). If the appraiser does not include all three approaches, the appraiser must include in the report why the other approach was not used. If cost approach is not used in the report, appraiser must state fair market value of land (for insurance determination purposes on building).

If the project involves improvements that will be equal to or greater than 1/3 of the cost of the land & building, then please instruct the appraiser that SBA will need the appraiser to complete a Post-Construction Certification form once the construction is complete. (See form below)

SBA requires a real estate appraisal if the estimated value of the Project Property is:

    a) Greater than $250,000; or
    b) $250,000 or less, if such appraisal is necessary for appropriate evaluation of creditworthiness.

The appraiser must be:

    a) Independent and have no appearance of a conflict of interest (such as a direct or indirect financial or other interest in the property or transaction); and
    b) Either State-licensed or State-certified with the following exception: when the Project Property's estimated value is over $1,000,000, the appraiser must be State-certified.

The appraisal report must be prepared in compliance with Uniform Standards of Professional Appraisal Practice (USPAP) and use one of the following options:

   a) A self-contained appraisal report; or
   b) A summary appraisal report.

Post Construction Certification
Effective Rates
June 2017

20 Year Rate: 4.514%
10 Year Rate: 4.596%

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