WASHINGTON–Three federal banking agencies have issued an interim final rule to temporarily defer real estate-related appraisals and evaluations under the agencies' interagency appraisal regulations.
NCUA will consider a similar proposal during its board meeting on Thursday. NCUA also joined the agencies in issuing a statement on addressing challenges related to appraisals.
The three agencies—the Fed, the FDIC, the OCC–said they are providing the temporary relief to allow regulated institutions to extend financing to creditworthy households and businesses quickly in the wake of the national emergency declared in connection with COVID-19.
The agencies are deferring certain appraisals and evaluations for up to 120 days after closing of residential or commercial real estate loan transactions. Transactions involving acquisition, development, and construction of real estate are excluded from this interim rule, the agencies said.
The temporary provisions will expire on Dec. 31, 2020, unless extended by the federal banking agencies.
Joint Statement
In addition, the federal banking agencies were joined by NCUA and the Consumer Financial Protection Bureau, in consultation with the Conference of State Bank Supervisors, in issuing a joint statement to address challenges relating to appraisals and evaluations for real estate-related financial transactions affected by COVID-19.
The interagency statement outlines other flexibilities in industry appraisal standards and in the agencies' appraisal regulations and describes temporary changes to Fannie Mae and Freddie Mac appraisal standards that can assist lenders during this challenging time. The agencies will continue to communicate with the industry, as appropriate.
Senate Session Adjourns
Separately, the Senate's pro-forma session adjourned early this week with no action taken on efforts to provide the Small Business Administration's paycheck protection program (PPP) with additional funds.
The $349 billion that was originally appropriated for the program could be fully allocated within the next week based on the pace of applications so far, noted NAFCU.
The Senate is expected to hold another pro-forma session Thursday. As Congress considers additional funding to keep the program running, NAFCU said it has requested that a portion of additional funds be set aside for credit unions to be able to meet their members' needs.
The Federal Reserve last week also announced the terms of its PPP facility, which was created to extend credit to eligible financial institutions that originate the loans.