Appraisal Expiration: The 120-Day "Refresh" Requirement

Rule

For all DSCR loan transactions, the appraisal or property valuation must be dated no more than 120 days from the Note Date. If a loan does not close within this four-month window, the original appraisal is considered expired and a formal update or a new report will be required.

Lendency Insight

In a dynamic real estate market, values can shift rapidly. To protect both the investor and the lender, we must ensure the collateral value is based on the most current data available. While some traditional products allow for 6-month validity, our 120-day "Refresh" rule ensures that the DSCR calculation—which relies heavily on the "Market Rent" determined by the appraiser—remains accurate. If your deal hits a snag (such as title issues or entity formation delays) and you approach the 120-day mark, you may be eligible for an Appraisal Recertification. This is a shorter update that extends the validity for up to 30 days, provided it occurs within 180 days of the original report date.

Common Scenarios & FAQs

  • What happens if my appraisal hits 121 days? You will need to order an update or a new appraisal. This will incur additional costs and can delay your closing by 5 to 10 business days.

  • Does this apply to multi-family properties? Yes. The 120-day rule applies to all residential property types, including single-family homes and 2-4 unit properties.

  • Can I use an appraisal from a different lender? We may accept transferred appraisals if they meet our internal standards, were completed by an approved Appraisal Management Company (AMC), and fall within the 120-day window.

  • What if the value changes during the refresh? If a new valuation or update shows a lower value, we must re-size the loan based on that lower figure to maintain the required LTV.

Key Definitions

  • Note Date: The day the borrower signs the promissory note, officially committing to the loan terms.

  • Appraisal Recertification: A "Recertification of Value" (ROV) or update that confirms the property's value has not declined since the original inspection.

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