On Sept. 27, 2019, the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency all announced they have adopted a joint final rule increasing the threshold for residential real estate transactions requiring an appraisal from $250,000 to $400,000. The appraisal threshold had not changed in 25 years. The 79-page final rule requires that for residential real estate transactions exempted from the appraisal requirement as a result of the revised threshold, institutions must obtain an evaluation of the real property collateral consistent with safe and sound banking practices. The final rule also adds to the list of exempt transactions those transactions secured by residential property in rural areas that have been exempted from the appraisal requirement pursuant to the Economic Growth, Regulatory Relief and Consumer Protection Act.
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