The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued a final rule that increases the threshold for commercial real estate transactions requiring an appraisal from $250,000 to $500,000.
The federal government made the annoucement on Monday, April 2.
The agencies originally proposed to raise the threshold, which has been in place since 1994, to $400,000. But officials determined that a $500,000 threshold will materially reduce regulatory burden and the number of transactions that require an appraisal.
The final rule allows a financial institution to use an evaluation rather than an appraisal for commercial real estate transactions exempted by the $500,000 threshold.