The financial regulatory agencies today issued a proposal that would raise the appraisal threshold for residential real estate transactions from $250,000 to $400,000. The proposal followed numerous concerns raised by ABA and other industry stakeholders over the time and cost of appraisals. Comments on the proposal will be due 60 days after publication in the Federal Register.
Under the proposal, transactions that qualified for the exemption would still need to obtain an evaluation consistent with safe and sound banking practices. The evaluation would provide an estimate of the market value of the property, but would not be required to be prepared by a state licensed or certified appraisal, and would be less detailed and costly than an appraisal. In addition, the proposal would incorporate an exemption for rural residential appraisals that was mandated by the new regulatory reform law.