Appraiser considers this a one bedroom home

[kburton66]

We are looking for a construction loan preferably that can be converted to a permanent 30 year fixed loan upon completion of construction. The mortgage we are looking for is about $330,000. We personally would qualify as far as income, assets, credit rating, down payment. Our problem is that the design of our home has the master suite on the main floor and the second and third bedrooms are on the walkout basement level (below grade in appraiserspeak). It is impossible to find a comp. It doesn't matter that it will be completely finished with bathroom and familyroom. Egress is no problem, one br has a door and both could.

[Bruce Brown]

With new construction even with a lack of comps there should be a way to determine value. The question becomes will your construction lender accept it.

Is there anything else unusual about the property? This is a very typical type home in many places, usually called a reverse 1 1/2 or atrium ranch.

Are you in a suburban area or rural?

[kburton66]

Thanks for your information. (Working without my notes here) I talked to another mortgage lender today with the same story; without comps we cannot get into the secondary market and mortgage guidelines are very specific and very rigid. An appraiser came up with an appraisal of $300,000 (which is ok wih us) citing comparable square footage and making some adjustments. The construction mortgage bank said that one secondary wouldn't accept it. Without a permanent mortgage in place they cant give the construction loan. We are in a rural area on 2 acres deeded out of a family farm.
Thanks again

[Bruce Brown]

Appraisal guidelines are just that, guidelines. While the secondary market does have requirements guidelines must sometimes be overlooked because comps don't exist so the appraiser must do their best to determine value. This then leaves the decision to an underwriter who generally is unwilling to put their neck on the line for a loan that may not be able to be sold. in today's market underwriters almost always will take the most conservative approach. The real problem here is likely that you're in a rural area as comps are frequently hard to come by. Do you have a copy of that appraisal you could email me to review for you?

One other thing to note is that many lenders or investors have what we refer to as overlays. An overlay is a guideline or requirement that is stricter than an agency guideline that Fannie or Freddie might have. This could be another issue you're running into.

You have to separate the construction loan from the loan that would be sold on the secondary market once the home is complete as the guidelines for each could be very different.

[kburton66]

Bruce,
I appreciate your time and your information. My wife said the construction loan lender has the appraisal. We paid for it and I don't know if we can get a copy.
I sent an email to our closest CMPS agent in Indianapolis. Hopefully he may work with us. We used a broker when we lived in Michigan and were quite pleased with him.
Thanks