Agencies To Raise Appraisal Threshold For Residential Real Estate Transactions

Author:Mr Cadwalader, Wickersham & Taft LLP
Profession:Cadwalader, Wickersham & Taft LLP
 
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The Federal Reserve Board, the Office of the Comptroller of the Currency, and the FDIC adopted a final rule that will exempt residential real estate transactions of $400,000 or less from appraisal requirements.

In addition to raising the appraisal threshold from $250,000 to $400,000, the final rule will:

require institutions whose transactions are exempted from the appraisal requirement to get an evaluation of the real property collateral that contains "sufficient information and analysis to support the decision to engage in the transaction"; define a "residential real estate transaction" as one secured by a single 1-to-4 family residential property; implement changes required by the Economic Growth, Regulatory Relief and Consumer Protection Act by (i) adding certain transactions secured by residential property in rural areas to the list of exempt transactions, and (ii) requiring institutions...

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