EPB Employees Credit Union provides real estate and other appropriate forms of financing for its membership. Major importance is placed on making economical, nondiscriminatory home mortgages available for members along with other forms of lending which contribute to the members' economic growth and stability.

A quality portfolio of real estate loans originated by EPB Employees Credit Union is critical to its stability and predictability of its earnings. Maintenance of loan quality depends upon sound underwriting and analysis of loan requests. Real estate appraisals are one of the important elements of sound underwriting and, therefore, must be of high quality, nondiscriminatory, prepared in accordance with professional standards, and the particular needs and concerns of EPB Employees Credit Union as articulated in these policies. Furthermore, appraisers must be independent of any influences, financial or otherwise, which would in any way detract from the objectivity of the reports prepared by them.

1. The appraisal should consist of a written statement independently and impartially prepared by a qualified appraiser setting forth the appraiser's opinion as to the market value of the property as of a specific date, supported by the presentation and analysis of relevant market information.

2. The appraisal must conform to the Uniform Standard of Professional Appraisal Practice (USPAP) adopted by the Appraisal Standards Board of the Appraisal Foundation (other than the Departure Provision of the USPAP).

3. The appraisal must disclose any steps taken that were necessary or appropriate to comply with the Competency Provisions of the USPAP.

4. The appraisal must be based on the following definition of market value:



The most probable price that the property should bring at a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. The price should assume a cash sale, or in terms of financial arrangements comparable to a cash sale, and should represent the normal consideration for the property unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

5. The appraisal should analyze and report in reasonable detail any prior sales of the property being appraised that occurred within one year proceeding the appraisal date.

6. All appraisals shall be prepared by a state certified appraiser or a state licensed appraiser.

7. The Credit Union may accept an appraisal that was prepared by an appraiser engaged directly by another bank, thrift, or credit union insured by the FDIC, SAIF or NCUSIF, as long as:

1. a qualified appraiser performed the appraisal under these guidelines; and,
2. the appraisal report meets the standards set forth respectively, if the loan officer determines that, in these guidelines, there is no evidence of an obvious and material deterioration in the market conditions or fiscal aspects of the property that would indicate a decline in market value since the date of the appraisal. The loan officer must document in writing the above review process and attach the review to the appraisal report.

8. The appraisal report should include the following:
1. Written and presented in a narrative format or on forms that satisfies all requirements of this section;
2. Sufficiently descriptive to enable the reader to ascertain the estimated market value and the rationale for the estimate;
3. Provide the detail and depth of analysis that reflect the complexity of the real estate appraised;
4. An analysis on current revenues, expenses, and vacancies for property if it is and will continue to be income producing;
5. An analysis on the marketing period for the subject property;
6. An analysis on current market conditions and trends that will affect the value of the subject property;
7. In addition to the certification required by the USPAP, include a statement that the appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan;
8. A legal description of the real estate being appraised;
9. An identification and separate valuation of any personal property, fixtures, or intangibles items that are not real property but included in the appraisal, and discuss the impact to their inclusion or exclusion on the estimate of market value;
10. Demonstrate a reasonable valuation method that addresses the direct sales comparison, income, and cost approaches to market value, reconciles those approaches, and explains the elimination of each approach not used.

Approved June 30, 1994
Reviewed May 23, 1996
Reviewed August 20, 1998
Reviewed August 26, 1999
Reviewed May 23, 2002
Reviewed July 24, 2003
Reviewed March 16, 2005