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Need clarification regarding the ECOA Appraisal Rule for Construction Loans.
Per 1002.14(a)(1) 1. Coverage. Section 1002.14 covers applications for credit to be secured by a first lien on a dwelling, as that term is defined in § 1002.14(b)(2), whether the credit is for a business purpose (for example, a loan to start a business) or a consumer purpose (for example, a loan to purchase a home).
I think we should give the borrower a copy of the appraisal upon completion or 3 days prior to closing, which ever is earlier. Even if the borrower is a business and building a spec or contract home because we are taking a lien on what will be a dwelling. But then again the house is not built yet so should we be giving the borrower the appraisal? Especially if a builder is the one doing the construction loan?
The Small Entity Guide for ECOA Appraisal Rule does not address this either. It only states that the exemptions are subordinate liens or vacant land which again leads me to believe that we should give the borrower a copy of the appraisal on construction loans.
Sorry for the long question 🙂
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