Feds hike threshold for appraisals tied to commercial real estate loans

Deals below $500k won’t require certified appraisal, instead of previous $250k limit

Apr.April 02, 2018 05:30 PM

California Investment Immigration Fund, LLC operated out this space at a Hilton-brand hotel in San Gabriel, California (Credit: Pixabay)

New federal regulations mean fewer commercial real estate-related loans will require an independent, certified appraiser to weigh in on a property’s value before a bank can lend against it.

An inter-agency group of regulators decided on Monday to raise the threshold for commercial real estate deals that need approval from a state-certified appraiser from $250,000 to $500,000, Reuters reported.

Now, financial institutions can utilize the less stringent evaluation process instead of a certified appraisal for deals below the threshold. Evaluations also provide a market value estimate but do not have to comply with federal standards.

Raising the threshold “will materially reduce regulatory burden,” according to a joint press release from the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, adding that upping the limit “will not pose a threat to the safety and soundness of financial institutions.”

The $250,000 limit was established in 1994. Regulators originally proposed raising the limit to $400,000 to keep it in line with inflation, but decided to raise the limit higher after considering comments from appraisers, financial institutions, and trade organizations received during a comment period last year. [Reuters] – Dennis Lynch 

Related Articles

Rendering of the Brickell hotel development, Tony Cho and Robert Finvarb

Finvarb and Cho land construction loan for mixed-use hotel near Brickell City Centre

State report finds open gas valve fueled building explosion at Plantation shopping center

Bayside Marketplace is planning another high-rise entertainment venue with a view

Construction of downtown Hollywood high-rise may start soon

South Florida firm, partner acquire Tampa office building for $29.4M

Developer borrows $105M, breaks ground for mixed-use Flagler Village project

Moishe Mana plans mixed-use project with logistics theme next to airport in Panama

Neiman Marcus CEO Geoffroy Van Raemdonck (Credit: Getty Images)

Struggling Neiman Marcus scores loan from Credit Suisse for Coral Gables store