Subject-To

A subject-to appraisal is a valuation completed based on the assumption that a specific condition, repair or improvement has been completed, even though it has not been finished at the time of inspection. The appraiser reports value as if the stated work is complete.

This approach is commonly used in purchase transactions involving new construction, renovation loans or properties requiring repairs to meet lender or program eligibility standards. The appraisal report must clearly identify the subject-to condition and describe the work assumed complete, with the final value tied directly to that assumption.

For loan originators, subject-to appraisals typically require a completion inspection before loan closing or fund disbursement to confirm the work was performed as specified. When the completed improvements fall short of what was assumed, the original value conclusion may no longer be supportable, creating collateral risk that must be addressed before the transaction can close.