As I understand the scenario, there is a purchase for the home and the purchase contract includes some work to modify the structure for handicap accessible features.
Basically what appears to be happening is the lender is financing the improvements as well as the purchase. It’s not a common situation but there are lots of lenders who can do type of loan.
Assuming it’s handled legitimately (??) this loan probably isn’t going into a conventional program; more likely one of the community banks or possibly some specialty lender or involving some government grant.
From an appraisal standpoint this type of appraisal problem can be resolved without any sleight of hand. We would have an “As Is” value of the house prior to improvements, and a value “subject to completion” of the improvements as specified. It’s just like a construction loan, wherein the project starts off with a vacant lot and the lender finances all the construction. The lender would fund conrol the costs of construction, doling out portions of it to cover the costs at the various stages of completion.
The only difference in this case is that instead of doing all new construction we’re only talking about remodeling costs. Adding ramps, widening doors, new kitchen and bath cabinets and fixtures, non-twist doorknobs, etc..
