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Regulators to Implement a Rule that Expands Exemption from CRE Appraisals

April 4, 2018

More regulation has been finalized by bank regulators that will directly effect commercial real estate transactions, according to a recent report from American Banker

 

"As part of a larger regulatory relief effort, the bank regulators issued a final rule Monday that raises the dollar-amount threshold for commercial real estate transactions that require a formal appraisal by lenders," according to the report.

 

"The rule raises the threshold from $250,000 to $500,000 for commercial real estate transactions. Under the new rule, more transactions are exempt from a long-standing requirement to get an appraisal. Instead, banks can simply get an evaluation of the real property collateral."

 

The report further states that part of the motivation behind the rise in the threshold was a desire for less paperwork and a more streamlined process. Streamlining has become the major motive in reducing much of the paper and manual work involved in many sectors of the mortgage world.

 

"The Economic Growth and Regulatory Paperwork Reduction Act requires the regulators, every 10 years, to conduct a review to identify outdated or otherwise unnecessary or burdensome rules," according to the report.

 

To learn more about the new rule and how it will effect the commercial real restate transactions threshold, click on the image above

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