The Interagency Appraisal and Evaluation Guidelines provide general guidance for using a risk-based approach when relying on real property evaluations, but they do not address your specific facts.

With its very low loan-to-value ratio here, the loan likely should be treated as a low-risk transaction. Taken together with your appraiser's recommendation for a land evaluation (and based on these facts alone), we think a land evaluation should be sufficient in this instance.

For resources related to our guidance, please see:

• Interagency Appraisal and Evaluation Guidelines (December 10, 2010) (“An evaluation must be consistent with safe and sound banking practices and should support the institution's decision to engage in the transaction. An institution should be able to demonstrate that an evaluation, whether prepared by an individual or supported by an analytical method or a technological tool, provides a reliable estimate of the collateral's market value as of a stated effective date prior to the decision to enter into a transaction.”)