WASHINGTON–Federal banking agencies have increased theappraisal threshold for real estate transactions secured by a 1-to-4 family residential property to $400,000 from $250,000 to $400,000. Banks will still be required, however, to obtain evaluations of the transactions “consistent with safe and sound banking practices,” the agencies said.
In a statement jointly released by the Federal Reserve Board, FDIC, and OCC, the regulators said, “The agencies have consulted with the Consumer Financial Protection Bureau (CFPB), and, as required by statute, have received its concurrence on the increased threshold. The CFPB released its letter concurring that the increased threshold provides reasonable protection for consumers who purchase 1-4 unit single-family residences.”
NCUA Expected to Follow
NCUA is expected to propose a rule to increase the threshold for credit unions this year, which will likely provide parity with banks, NASFCU noted.
As CUToday.info reported earlier, NCUA in July finalized a rule to increase commercial real estate appraisals – for non-residential, rural real-estate-related financial transactions – from $250,000 to $1 million.
The new rule approved by the banking agencies includes a conforming amendment reflecting an exemption provided by the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) for transactions secured by residential property in rural areas (evaluations will be required, however). They also include a provision that requires regulated institutions to subject appraisals for federally related transactions to appropriate review for compliance with the Uniform Standards of Professional Appraisal Practice (USPAP).