The Quick Read: The appraiser values a home that may not exist yet, so the report rests on your plans, your specifications and the sales of comparable homes. The appraised “as completed” value has to support your contract price. If it does, the loan amount holds. If it falls short, you cover the gap, renegotiate or restructure. A second appraisal on a jumbo loan is a lender rule, not a federal one, and it varies by lender and loan amount.
Key Takeaways
- Jumbo means the loan is larger than the conforming limit for your county. That limit changes yearly, so check the FHFA conforming loan limit page for your county.
- The appraiser values the finished home from plans, specs and comparable sales. Your builder’s price is not the value.
- Two appraisals can come into play on a jumbo loan, but that depends on the lender’s loan-amount threshold. It is not automatic.
- The most common surprise is a gap between the contract price and the appraised value. You can prepare for it before you sign.
- Completion has to be verified before the loan finalizes. That is a separate step from the appraisal.
What Makes a New-Construction Jumbo Appraisal Different?
A new-construction appraisal values a home on paper, while an existing-home appraisal values one you can walk through. That single difference drives every other step. The appraiser has no finished interior to inspect, no sales history on the property and often few nearby sales of truly similar homes.
Jumbo payment estimate
The starting figures are an example price in the jumbo range with ten percent down on a thirty-year fixed. Replace them with yours.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a jumbo loan quote.
Illustrative starting assumptions: a $1,000,000 price in the jumbo range, ten percent down on the top-leverage lane, a thirty-year fixed structure at the current Freddie Mac conforming benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conforming benchmark, a market reference and not a jumbo loan quote; jumbo rates are set by the lender and the lane at lock and differ from the conforming benchmark. An adjustable-rate scenario is shown at the benchmark for the whole term; the rate after the initial period is unknown. Reserve months and appraisal counts follow the lane sheet for the amount band; the automated finding may require more. Taxes, insurance and dues are editable estimates; closing costs are not included. On most lanes the conforming limit for the county decides whether a loan is jumbo at all; two lanes start at a stated dollar floor instead. Licensed in sixteen states for consumer mortgages.
Jumbo loans add a second layer of attention. The loan balance is large, so the collateral gets a closer look. Among the jumbo loan programs Lendmire arranges through wholesale lenders, the headline lane starts at a 660 decision score and reaches up to 90% leverage. The largest lanes go to $5,000,000. Reserves and appraisal requirements scale as the amount rises. All of that is subject to lender guidelines and full file review.
Here is the practical point. The higher the leverage, the less cushion you have if the appraisal comes in below the price. At 90% leverage on a purchase, a small value shortfall translates into a real cash need. At lower leverage you have room to absorb it. That tradeoff is worth thinking through before you pick a down payment, not after the appraisal lands. Every figure here varies by lender and program: guidelines, property type, leverage and credit profile all apply.
The Appraisal Sequence, Step by Step
The sequence runs from contract to completion check. Each step has a purpose, and a gap in any one of them can slow the file.
1. Contract and plans. For a home not yet built, the appraisal rests on the plans and specifications, an existing model home, or other information that shows quality and character. Fannie Mae’s Selling Guide describes this basis for conforming loans. Many jumbo lenders borrow that standard as a reference point, then add their own overlays.
2. “As completed” or “as is.” An unfinished home is appraised “subject to completion per plans and specifications.” A finished home is appraised “as is.” Lenders sizing a purchase loan care about the first one, because it tells them what the home will be worth when it is done.
3. Comparable sales. The appraiser picks recently sold homes that resemble yours and adjusts for differences. Conforming guidance expects at least three closed comparables. In a new subdivision, appraisers often prefer sales that did not involve the builder, since the builder’s own sales can reflect concessions.
4. Concessions and incentives. The appraiser checks the sale conditions, including builder credits and upgrades. More on that below.
5. Reconciliation. The appraiser blends the sales comparison with a cost approach (what it costs to build) and lands on one opinion of value.
6. Completion verification. When the home is finished, the lender confirms it matches the plans. That usually means a completion report from the appraiser, or in some cases a builder or borrower attestation that construction followed the plans and any change orders.
Two points trip people up. Draw inspections, which release construction money in stages, are not appraisals. And the plans-based appraisal is not the final word: it is a promise of value that the completion check has to confirm.
Documents the Appraiser Needs
The appraiser can only be as accurate as the package you hand over. A thin package leads to conservative assumptions. Here is what a typical package contains and who normally supplies it.
| Document | Usually supplied by | Why it matters |
|---|---|---|
| Full plans and specifications | Builder | Defines size, layout and finish level |
| Ratified sales contract with addenda | Buyer / builder | Shows price, credits and concessions |
| Survey or plot plan | Builder / buyer | Confirms lot size and placement |
| Itemized options and upgrades list | Builder | Supports contributory value |
| Builder certification | Builder | Confirms build per plans |
| Recent photos of the site or model | Builder / appraiser | Shows setting and quality level |
Ask the builder for the complete package before the appraisal is ordered. Missing pages, an unsigned addendum or an outdated spec sheet are the usual causes of a delayed or lower report. A lender or its appraisal management company may order the appraiser, so you often cannot choose who does it. You can, however, make sure that person has what they need.
How Appraisers Value a Home With Few Comparable Sales
When comparable sales are scarce, the appraiser leans harder on the cost approach and on adjustments, and that is where a custom or high-end build tends to lose ground. Jumbo homes are often larger and more distinctive than their neighbors, so truly matching sales can be thin.
Several things help the appraiser, and in turn help you:
- Model-home and spec-home sales. Sales of the same builder’s similar plans give a useful anchor.
- Sales outside the subdivision. Resales nearby can show how the market values similar size and quality.
- Itemized upgrades. The appraiser credits what the market pays for an upgrade, not what you paid for it. A pricey custom feature may add less than its cost.
- Land value support. If you already own the lot, recent lot sales help the appraiser separate land from improvements.
Here is a judgment call worth making early. If your design is unusual, ask the builder how many similar homes have actually sold nearby. A plan with no true comparables is not a dealbreaker, but it does raise the odds of a value shortfall. A more conventional floor plan with the same square footage often appraises more cleanly.
Builder Incentives and the Appraised Value
Builder credits and concessions can make the contract price higher than what the market supports. The appraiser has to decide whether the price reflects true value or a price inflated to fund incentives.
Fannie Mae’s guidance on adjustments says strict dollar-for-dollar deductions for concessions are not appropriate unless the appraiser finds the market actually reacts that way. That is a conforming reference, and jumbo lenders can be stricter or looser. Some set caps on seller or builder contributions. Others accept what the appraiser supports.
In practice, a builder offering a large closing credit may be quietly pricing it into the home. If comparable sales show lower prices without that credit, the appraised value can land below your contract. Ask your builder how incentives are structured, and ask your loan officer how the lender treats them before you sign.
One Closing or Two? Structure Changes the Appraisal Picture
New-construction financing generally comes in two shapes, and the appraisal timing differs.
Single-closing (construction-to-permanent). One loan covers the build and then converts to a permanent mortgage. You qualify once, but the loan generally cannot be finalized until construction is complete and verified. The appraisal is based on the “as completed” value of lot plus improvements.
Two-closing. The first loan funds the build, sometimes including the lot. A second loan, the permanent mortgage, pays it off at completion. You re-qualify at the second closing, and a fresh appraisal may be part of that step.
The tradeoff is predictability versus flexibility. A single closing locks in your structure up front, which helps if you worry about your finances changing mid-build. Two closings give you a chance to reshop the permanent loan, but you take on the risk that conditions have shifted by then. Lender and program overlays decide which structure is available on a given jumbo file.
If you are buying a finished or nearly finished home directly from a builder, none of this applies. You are closing a standard purchase on a completed house, appraised “as is.”
Second Appraisals on Jumbo Loans
Many jumbo borrowers assume two appraisals are required by law. They are not. The second appraisal on a jumbo loan is a lender policy, and it varies by lender and loan amount.
Across the wholesale jumbo programs Lendmire places files with, the pattern is consistent. A lane sets a loan-amount threshold, and above it two full appraisals are required. Below it, one is enough. The threshold differs by lane, so the same home could need one appraisal in one program and two in another.
Here is what to ask your loan officer:
- Does this lane require two appraisals at my loan amount?
- Are they both at the plans stage, at completion, or one of each?
- Which value sets the loan if the two differ? (Lenders commonly use the lower.)
- Does the second appraisal change my timing around contract deadlines?
There is also a separate federal “flip” rule that can require a second appraisal when the seller recently bought and resold the property. It is tied to the seller’s resale history, not to loan size. Most sales of a brand-new home from a builder are first sales, so it rarely applies. Rarely is not never, so ask.
Where the General Rule Breaks
A few situations bend the usual picture.
Postponed improvements. Some programs allow small unfinished items, like landscaping or a driveway, to be completed after closing with funds held back. Whether a jumbo lender permits this depends on its guidelines. Do not assume it.
Certificate of occupancy. Some lenders ask for the certificate of occupancy along with the completion report. Others accept the completion report alone. Get your lender’s requirement in writing early.
Cash-out on a new build. Cash-out refinances generally do not fit single-closing construction financing. Jumbo cash-out is also capped at lower leverage than a purchase, with a cash cap on the largest lanes.
Renovation versus new build. Renovation loans follow different rules, including a separate completion certification. A gut renovation is not a ground-up build, so do not mix the requirements.
Second homes and investment use. Occupancy affects the leverage a lane allows. This article assumes you will live in the home. If you plan to use it as a second home, the leverage and terms differ by lane, so raise that early.
Expiring paperwork. On a long build, credit and income documents can age out. Lenders typically want refreshed documents near completion. Plan for that, because a changed job or new debt can alter the file between start and finish.
Condominiums. New condo projects can raise extra questions. Two of the jumbo lanes accept non-warrantable condos, which helps when a project falls outside standard agency rules.
What Happens If the Value Comes In Low?
A low appraisal does not end the deal. It gives you a set of choices, and the right one depends on how big the gap is and how much room you have.
Picture a purchase at 85% leverage where the appraised value comes in about 4% under the contract price. The loan is sized off the lower number. That leaves a gap you must cover with cash, a price reduction or a restructure. Final terms depend on lender guidelines, property type, leverage and the borrower’s complete credit picture.
| Option | When it makes sense | Tradeoff |
|---|---|---|
| Ask for a reconsideration of value | You have better comparables or missed upgrades | No guarantee; the appraiser may hold |
| Renegotiate with the builder | The contract has a price-adjustment path | The builder may refuse |
| Bring more cash | The gap is small and the home is worth it to you | Less liquidity after closing |
| Lower the loan amount or leverage | You have the funds and want a safer structure | Larger down payment |
| Change the specification | Costly options can be dropped or reduced | You get a different home |
| Walk away | The contract allows it and the gap is large | You lose time and may lose deposits |
Reconsideration works best when you bring facts. Recent closed sales the appraiser did not use, receipts for contributory upgrades and a clear explanation of how incentives were handled give the appraiser something to act on. A complaint that the number feels low does not.
One caution. Closing the gap with cash solves the lender’s problem but not necessarily yours. If the market values the home below the price, you are paying the difference out of pocket for something the market will not credit you for later. That is a real decision, not a formality.
Your Right to See the Appraisal
You do not have to ask for your appraisal. On a loan secured by your home, the lender must give you a free copy of every appraisal or written valuation, and it must send written notice of that right promptly after your application, according to the CFPB’s ECOA valuations factsheet.
The copy is due promptly after the appraisal is completed, with the exact timing depending on the file and the lender. You can waive the timing requirement, per the Federal Register final rule. Think carefully before waiving. Reading the report early is how you catch a wrong square footage, a missed upgrade or an incorrect comparable while there is still time to challenge it.
Preparation Checklist
For the buyer
- Get the lender’s appraisal policy for your loan amount before signing the contract.
- Choose leverage with a possible shortfall in mind.
- Read the appraisal as soon as you receive it.
- Keep income, credit and asset documents current through the build.
For the builder
- Deliver complete plans, specs and the options list at the start.
- Document change orders and keep them aligned with the plans.
- Share comparable sales of similar homes you have built.
- Provide any certification or completion paperwork the lender asks for.
For the loan officer
- Confirm one or two appraisals and when each is ordered.
- Confirm how builder credits are treated.
- Confirm completion proof, including any certificate of occupancy.
- Flag the point at which documents must be refreshed.
Common mistakes
- Treating the contract price as the value.
- Missing that a plans-based value must be confirmed at completion.
- Assuming a second appraisal is a federal rule, or that it is never needed.
- Choosing very high leverage without a cushion for a shortfall.
- Waiving the appraisal copy timing and finding errors too late.
Key Terms Defined
As completed: A value opinion for the home as it will be once built to the plans and specifications.
As is: A value opinion for the home in its present condition, used for finished homes.
Cost approach: A method that estimates value from the cost to build the home plus the land value.
Sales comparison approach: A method that estimates value from recent sales of similar homes, with adjustments for differences.
Contributory value: What the market will pay for a feature, which can be less than what the feature cost.
Reconsideration of value: A request that the appraiser review the report using new or overlooked information.
Completion report: A document confirming the home was finished according to the plans and the appraisal’s conditions.
Conforming loan limit: The maximum loan size set by FHFA for a county and unit count. A loan above it is jumbo. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Where to Go From Here
If you are buying a home and want to see whether a jumbo loan fits your file, Lendmire can help you compare the options and what each one asks of the file. Bring your plans, your contract and your questions about appraisal policy, and the conversation can start from the real numbers. Program details are subject to lender guidelines and full file review, and nothing here is a commitment to lend. Lendmire is a mortgage broker and arranges these loans through wholesale lenders.
Frequently Asked Questions
Do all jumbo loans on new construction require two appraisals?
No. Federal rules do not require it on a typical builder sale. A second appraisal is a lender policy that usually kicks in above a loan-amount threshold, and the threshold differs by program. Ask which applies to your amount.
Does land I already own count toward the appraised value?
Yes, because the lot is part of the “as completed” value of land plus the finished home. Its value helps support the loan size. How the lender measures leverage against that combined value depends on the program, so confirm with your loan officer.
Do upgrades raise the appraised value?
Sometimes, but not dollar for dollar. The appraiser credits what the market pays for a feature, not what you spent. Itemized, documented upgrades give the appraiser something to weigh, while undocumented ones are often ignored.
What if the appraisal is below the builder’s price?
The loan is sized off the lower number, so you have to cover the gap, renegotiate or restructure. You can also ask for a reconsideration of value with better comparables or upgrade documentation. A low report does not end the contract on its own.
Can I choose my appraiser?
Usually not. Lenders generally order the appraiser, often through an appraisal management company, to keep the valuation independent. You can still help by making sure the plans, specs and comparable-sale information reach the appraiser through the builder and your loan officer.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. FHFA — Conforming Loan Limit
2. Fannie Mae Selling Guide — Requirements for Verifying Completion and Postponed Improvements
3. Fannie Mae Selling Guide — Adjustments to Comparable Sales
4. CFPB — ECOA Valuations Transaction Coverage Factsheet
This article is part of Lendmire’s jumbo loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Handle a Low Appraisal on a New Construction Jumbo Loan · How to Meet Jumbo Loan Offer Letter Requirements for a Relocating Executive · How to Meet Jumbo Loan Reserve Requirements for a Retiree Buying a Second Home
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.