Saint Cloud Mortgage

Basic Guidelines for Appraisal 

• Appraisal must be ordered by mortgage broker and addressed to St. Cloud Mortgage. An original appraisal is preferred versus a copy. 

• If St. Cloud Mortgage is originating, effective date of appraisal must be less than 12 months old prior to St. Cloud's Mortgage approval date. 

• For construction or take out loans, appraisal must contain an "as is" value, "prospective market value" with projected date, and if applicable, a "stabilized occupancy value" with a projected date. 

• Loans < $2,500,000 must be Limited Summary or better format, meaning one or more approaches may be omitted; however, the most relevant approach (which may differ from case to case) cannot be omitted. Please provide Sales Comparison and Income Capitalization approaches for nearly all appraisals < $2,500,000. 

• Loans > $2,500,000 must be Complete Summary or better format, meaning all applicable approaches to value are utilized, including income capitalization, direct sales comparison and cost. Special use properties may require a Self-Contained format versus Summary. 

• Loans > $4,000,000 must be Complete Self-Contained format. 

• Market overview should be specific to the subject's local market not just the region. It should address vacancy, lease rates, pricing, absorption and future activity in the market. 

• If the subject is proposed, a feasibility overview should support the need for the subject property. 

• The report should include detailed photographs of the subject interior and exterior. Photographs of all comparable sales and rental properties should also be included. 

• The report should include detailed maps indicating location of the subject and the comparable properties. 

• Detailed description of the comparable properties and support for adjustments with adjustment grid should be included. 

• If FF&E is an integral part of the subject property's operations, then value established by the appraiser must be supported. 

• The appraisal should include an insurable value and for special-use properties, a liquidation value should be included. 

• Regarding refinances, if the property has been purchased within the last 36 months, St. Cloud Mortgage will most likely place more weight on the purchase price rather than the appraised value to determine a market value for the property. 

• If renovations have been completed after purchase, a detailed list of renovations plus the actual costs associated with the renovations may be considered. 

Income Capitalization Approach 

• Comparable leased properties must be located in the same market, be similar in use, quality, age/condition, date and term of lease and functionality. 

• Adjustments for rent rates are allowed provided the adjustments do not exceed 15% 

• If leased, there should be a rent roll. 

• Expenses should closely reflect actual/historical expenses. 

Direct Sales Comparison Approach 

• Comparable leased properties must be located in the same market, be similar in use, quality, age/condition, date and term of lease and functionality. Adjustments for rent rates are allowed provided the adjustments do not exceed 15% 

• If leased, there should be a rent roll. 

• Expenses should closely reflect actual/historical expenses. 

• Comparable properties need to be consistent in ownership interest. More specifically, a fee simple property should be compared to other fee simple properties (or match that of the subject, or be converted to fee simple with adjustments). 

• Comparable properties must bracket subject on a per square foot basis prior to adjustments (comparable properties adjusted over 15% are not considered comparables). 

• Building material type, age, size, location, quality, build out, etc. must closely reflect that of the subject.