Seal of the Board of Governors of the Federal Reserve System
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.  20551
DIVISION OF BANKING
SUPERVISION AND REGULATION
SR 94-35 (FIS)
June 8, 1994

TO THE OFFICER IN CHARGE OF SUPERVISION
AT EACH FEDERAL RESERVE BANK
SUBJECT:  Amendments to the Real Estate Appraisal Regulation

On June 7, 1994, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation (collectively the agencies) published in the Federal Register1 amendments to their real estate appraisal regulations. Attached is a copy of the final rule. These amendments become effective on that date.

The agencies adopted these amendments in order to reduce regulatory burden while still requiring Title XI of FIRREA appraisals when necessary to protect the safety and soundness of financial institutions. Further, these amendments will bring uniformity to the agencies' appraisal regulations.

These amendments include:

  1. An increase to $250,000 in the threshold at or below which appraisals are not required pursuant to Title XI the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
  2. The addition of an exemption for real estate-secured small business loans of $1 million or less when the primary source of repayment for the loan does not depend on sale of, or rental income derived from, real estate.
  3. The expansion and clarification of the exemption for renewals and refinancings of existing extensions of credit
  4. The clarification of certain other transactions that are exempt from the appraisal requirement of Title XI.
  5. A narrowing of the type of exempt transactions for which evaluations are required.
  6. Revisions to the requirements governing appraisal content and the use of appraisals prepared by other financial services institutions.
  7. Removal of the ban against the use of the Departure Provision of the Uniform Standards Professional Appraisal Practice (USPAP).

As a result of these amendments to the Board's appraisal regulation, staff is also reviewing the related Guidelines for Real Estate Appraisal and Evaluation Programs.2 These guidelines will be revised in the near future to incorporate these regulatory changes and to provide further guidance on evaluations.

Please provide copies of this notice to state member banks and bank holding companies under your supervision.

If you have any questions, please contact Virginia Gibbs 202/452-2521 or Stan Rediger 202/452-2629

Richard Spillenkothen
Director


Attachment:
Real Estate Appraisals (3,463 KB PDF)
Office of the Comptroller of the Currency, Treasury
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of Thrift Supervision, Treasury
cc:
Board Members
Reserve Bank Presidents

Notes:
  1. Federal Reserve Board 12 CFR Part 225.59 Federal Register 29482, June 7, 1994.  Return to text
  2. SR Letter 92-33, September 28, 1992.  Return to text


SR letters | 1994
Home | Banking information and regulation
Accessibility | Contact Us
Last update: February 21, 2006