Commercial Real Estate (CRE) Appraisal Requirements Raised to $500,000—A Welcomed Relief for Community Banks

Since 1994, commercial real estate loans over $250,000 needed a full appraisal that conformed with laborious Title XI requirements.  As of April 2, 2018, The Federal Reserve, FDIC and OCC released a new rule raising the full appraisal exemption for Banks on loans at or below $500,000. See agency final rule document.

This is great news for our community banks that struggle to find qualified appraisers in rural areas and should greatly reduce the turn-around time for assessing the market value of properties. According to the Agencies’ press release, evaluations still need to “provide a market value estimate of the real estate pledged as collateral, but do not have to comply with the Uniform Standards of Professional Appraiser Practices and do not require completion by a state licensed or certified appraiser.”

Now that banks will not be required to have a full appraisal for many commercial real estate loans, they need to seek a provider whose products are compliant with Interagency Guidelines as they pertain to evaluations. See full Interagency Appraisal and Evaluation Guidelines.

Unitas Financial Services offers a full array of Commercial and Residential evaluations from various industry leaders that we tailor to an individual bank’s needs and geographical lending areas. We can streamline your process with our one stop shop. Learn more.