An Appraisal Out?
Bowing to Congressional and community-bank pressure, the FDIC today approved an interagency NPR raising the mandatory-appraisal threshold for CRE loans to $400,000 from the current $250,000 threshold set in 1994. The rule would also ease the appraisal thresholds to some extent for residential construction, but it does nothing to the fundamental, controversial appraisal requirements otherwise for one-to-four-family housing. However, a general question is posed on house appraisals, a question we think will open a floodgate of comments from bankers – especially community ones – trying to get out of the home-mortgage appraisal standard. Indeed, legislation (H.R. 3221) was introduced late last week to exempt loans in rural and certain under-served communities from the appraisal standard.