ABA Supports Proposal to Increase CRE Appraisal Threshold

ABA on Friday wrote to the regulatory agencies in support of a proposal that would raise the appraisal threshold for commercial real estate transactions from $250,000 to $400,000. The association noted that the proposal reflects “a simple and clear-cut change that can be implemented with ease,” and that it would provide immediate relief to banks that are currently struggling with a shortage of certified appraisers — particularly in rural areas — and long appraisal turnaround times.

While the proposal would lift the dollar threshold at which an appraisal would be required, it would also put in place risk control measures for banks that choose to forego appraisals in order to maintain safety and soundness. ABA supported these measures, noting that they “will serve as an effective safeguard to the proposed threshold increase because alternative valuation methods can be highly reliable and assure accuracy via various approaches to value conclusions.”

The association also called on regulators to consider increasing the threshold for appraisal requirements for residential transactions. For more information, contact ABA’s Sharon Whitaker.