TO THE OFFICER IN CHARGE OF SUPERVISION
AT EACH FEDERAL RESERVE BANK
SUBJECT: Amendments to the Real Estate Appraisal
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
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:
- 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.
- 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.
- The expansion and clarification of the exemption for renewals and refinancings
of existing extensions of credit
- The clarification of certain other transactions that are exempt from the
appraisal requirement of Title XI.
- A narrowing of the type of exempt transactions for which evaluations are
- Revisions to the requirements governing appraisal content and the use
of appraisals prepared by other financial services institutions.
- 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
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
- Real Estate Appraisals
(3,463 KB PDF)
- Board Members
Reserve Bank Presidents
- Federal Reserve Board 12 CFR Part 225.59
Federal Register 29482, June 7, 1994. Return to text
- SR Letter 92-33, September 28, 1992. Return to text