Tom was halfway through a major home renovation when he ran out of cash. His bank denied the HELOC because the appraiser reported the house was torn apart.
The Situation
Tom owned his home outright (no mortgage)
Started a major renovation: new kitchen, bathrooms, flooring
Ran into unexpected costs halfway through and needed another $75K to finish
Applied for a HELOC at his bank to access the equity
The Challenge
The bank sent an appraiser to the property.
The appraiser reported back that the home was half torn apart: drywall missing, unfinished floors, kitchen gutted.
Bank denied the loan due to collateral condition. They couldn't lend against a property in that state.
Tom was stuck: renovation half-done and no access to his own equity.
How We Structured It
We approved the HELOC using an AVM (automated valuation model) instead of a full appraisal.
The AVM gave us a reliable property value without requiring an interior inspection or consideration of current condition.
Approved the loan, closed it, and got Tom the cash he needed to finish the renovation
Why This Might Matter
Most banks require a full appraisal for HELOCs, which means an appraiser has to inspect the property. If the home is under renovation, damaged, or otherwise not in marketable condition, that creates a collateral issue that can kill the deal.
Pattern to watch for:
Borrower mid-renovation who needs more funds
Home equity but property in rough condition
Fixer-upper scenarios where the borrower has equity but the house isn't appraisal-ready
Work With Me
Do you have a deal that doesn’t fit your credit policy but the client seems solid?
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