The market value of a property in its actual physical condition, use and zoning on the appraisal's effective date, with no credit for planned work.
The OCC handbook describes the as-is value as the current market value of a property, reflecting its actual physical condition, use and zoning designation as of the effective date of the appraisal. It is what the property would sell for today, before any of the borrower’s plans are carried out.
The handbook says appraisals supporting construction loans must include this value. It is the lender’s floor: if the project stops on day one, the as-is value is what stands behind the money already advanced. On a vacant or partly leased building, market value must include appropriate deductions and discounts, so an as-is figure can sit well below what the building will be worth once full. Appraisers often reach it by discounting expected future income, a method the handbook calls useful for properties that have not reached stabilized occupancy.
For a borrower, three values can appear in one report: as-is, as-complete and as-stabilized. Ask which one the lender uses for each test. On a renovation, a lender may limit the first advance by the as-is value, tie later advances to the work, and measure the final loan-to-value on a prospective value.
How it shows up in the data here
Not in the data. Appraised values are not in bank or credit union filings. HMDA reports one property value per covered loan without saying which kind it is. For a quick check of a loan against today's value, use the LTV and LTC calculator, and see construction lenders for banks that fund work on property valued this way.
Go further
- LTV and LTC calculator: Loan-to-value on today's value and loan-to-cost on the budget.
- Construction lenders: Banks and credit unions with construction and land loans.
- LTV and LTC calculator: Loan to value and loan to cost, the equity a lender will ask for, and the federal supervisory limit for the property type.
- Construction loan package checklist: A construction lender is lending against a building that does not exist yet. The package has to show what it will cost, who will build it, where every dollar comes from, and how the loan gets repaid when it is done.
- How bankers evaluate a commercial loan deal: A credit officer asks one question five ways: how will this loan be repaid, and what happens if it is not? Knowing the five tests lets you size a request before you send it.
Related terms
- Appraisal: A written, independent opinion of a property's market value as of a specific date, prepared by a qualified appraiser.
- As-complete value: An appraiser's estimate of what a property will be worth on the date construction is expected to be finished.
- As-stabilized value: An appraiser's estimate of what a property will be worth on the future date it is projected to reach stabilized occupancy.
- Loan-to-value ratio (LTV): The loan amount divided by the value of the property securing it. A $700,000 loan on a property valued at $1,000,000 is 70 percent loan to value.
- Value-add: Buying an underperforming property and raising its income through renovation, repairs or stronger management. Lenders call it repositioning or rehabilitation.
- After repair value (ARV): The estimated market value of a property once a planned renovation is finished, used to size fix-and-flip and other renovation loans.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.