On Friday, Sept. 27, federal banking agencies issued a final rule that raises the appraisal threshold for residential real estate transactions to $400,000. The threshold has been at $250,000. The new threshold addresses numerous concerns raised industry stakeholders over the time and cost of appraisals.
Under the rule, transactions that qualify for the exemption still need to obtain an evaluation consistent with safe and sound banking practices. This evaluation will provide an estimate of the market value of the property without requiring the involvement of a state licensed or certified appraiser. The final rule does not apply to loans sold to or guaranteed by the FHA, HUD, VA, Fannie Mae, or Freddie Mac – which will still require an appraisal, according to each agency’s rules.
For residential real estate transactions exempted from the appraisal requirement as a result of the revised threshold, regulated institutions must obtain an evaluation of the real property collateral that is consistent with safe and sound banking practices. (emphasis added).
Click here to see the notice.