April 2019
Ask The Experts
SBA 504 Q&A: Appraisal Waivers

Q: When can a real estate appraisal requirement be waived for a Small Business Administration (SBA) 504 loan?

Ask the SBA 504 Loan ExpertsA: Under revised guidance for the 504 Loan Program in SOP 50 10 5(J) and (K), the SBA requires a real estate appraisal if the estimated value of the project property is greater than $500,000.

However, if the estimated value of the project property is $500,000 or less under the following circumstances, an appraisal must be obtained:

1)  Equity in land owned for 2 years or more is being contributed as part of the borrower’s contribution;

2)  The real estate is the third party lender’s OREO;

3)  If the loan finances a transaction involving parties with a close relationship (e.g., transactions between existing owners or family members);

4)  The seller of the property is carrying back a loan that is part of the borrower’s contribution; or

5)  If the SBA or Certified Development Company otherwise concludes that an appraisal is necessary to appropriately evaluate creditworthiness.

If you have a question you’d like our SBA 504 loan experts to answer, email us at info@FloridaFirst.com or call 850.681.3601 or toll-free at 800.504.LOAN.