Will the Lender Value My Rental As-Is or After Renovation?

Reviewed by Ramez Malki, NMLS 315466 · Last verified October 2026

A HELOC or a cash-out refinance is normally sized on what the property is worth today, not on what it will be worth when the work is finished. That can change the amount you can borrow.

Short answerUsually as-is: the lender values the property in its current condition. If the property is vacant or mid-renovation, the appraisal may come in lower than the after-repair value you expect, so plan the loan amount around the conservative number.

As-is value vs. after-repair value (ARV)

As-is value is what the property would sell for in its current condition. ARV is the estimated value once the planned work is done. Renovation and fix and flip loans are often sized on ARV and on project cost, as explained in how the loan amount is calculated. Home equity products usually are not.

Illustrative example (not a quote)

A rental is worth $500,000 as-is and $650,000 after a planned renovation. If a lender caps the combined loan-to-value at 70% to 75% for investment property:

Value used	70% limit	75% limit
As-is, $500,000	$350,000	$375,000
If the appraisal is $450,000	$315,000	$337,500
After-repair, $650,000 (not used for these products)	$455,000	$487,500

A $50,000 shortfall in the appraisal lowers the available amount by $35,000 to $37,500 at these limits. If you need $120,000, the as-is numbers above still leave room, but a tighter limit or a lower appraisal could change that. Our Non-QM HELOC LTV limits page lists the ranges we describe for investment property.

Why a vacant or mid-renovation property can appraise lower

Open walls, missing fixtures or incomplete work reduce what a buyer would pay today.
Appraisers compare it with finished homes and adjust for condition.
Some lenders require the property to be in reasonable, habitable condition, as noted on our property types page.

How to plan around it

Size the loan on the conservative as-is number.
Ask the lender what condition standards apply before you order an appraisal.
If the as-is value is too low, consider whether a renovation-specific loan fits better.
Keep receipts and a scope of work; they help explain the improvements.

Frequently asked questions

Can I ask the appraiser to use the after-repair value?

On a home equity product the lender generally relies on the as-is value. Renovation loans are the usual place where after-repair value is used. Ask your loan officer which applies.

Does finishing the work first help?

It can, because a finished, rentable unit often appraises higher and shows income. The trade-off is that you need the money before the work is done.

Does a lower appraisal change my rate?

It can change the combined loan-to-value, which can affect pricing and the amount available.

Related guides

Rates and terms depend on your credit, property and loan amount; approval requires qualification. Contact Ramez Malki, NMLS #315466, at Lendia, Inc. (NMLS #295073 | Licensed by the California DRE #01877189). Lendia lends only on California properties.

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