Residential Real Estate Loan Appraisal Threshold Increases
Are your polices updated for the new thresholds for appraisals on Residential Real Estate loans? The Appraisal Rule was collectively amended by FDIC, Federal Reserve, and OCC. The threshold for requiring an appraisal on residential real estate transactions (secured by 1-4 family residential property) has been increased from $250,000 to $400,000. Under the new rule, Federally Regulated Institutions must obtain an appropriate evaluation for residential real transactions exempted from the appraisal requirements. This also includes the exempted transactions for rural residential properties provided by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRCCPA). Furthermore, for federally related transactions, the new rule requires appraisals to be subject to appropriate review for compliance with the Uniform Standards of Professional Appraisal Practice (USPAP).
New rule is effective October 9, 2019 except for requirements related to appraisal review and the evaluation requirement related to the rural residential exemption, which become effective January 1, 2020. With the new rule becoming effective, ensure all your appropriate policies are updated to incorporate the changes.
Article prepared by Yaziara Colon.