The federal regulatory agencies issued a proposal to increase the threshold for required appraisals for commercial real estate transactions from $250,000 to $400,000 following the FDIC’s board meeting yesterday. The proposal reflects feedback the agencies received through the Economic Growth and Regulatory Paperwork Reduction Act process. Comments on the proposal will be due 60 days after the notice is published in the Federal Register.
In response to growing concerns over a lack of certified appraisers, particularly in rural areas, the federal banking agencies earlier this year also issued a reminder of two existing approaches that institutions can use to address appraiser shortages, particularly in rural areas. The first approach, temporary practice permits, allows state-certified or licensed appraisers to provide services in other states. The second involves a temporary waiver request to use a state-certified or licensed appraiser in situations where a documented appraiser shortage has led to “significant delays” in appraisals on federal related transactions in a specific geographic area.
The American Bankers Association has been working closely with regulatory agencies, Congress and the Appraisal Qualifications Board to obtain meaningful relief from stringent appraisal requirements. The association will comment on the proposal and will continue to seek further improvements.
