Certain home sales of $400,000 and under will soon not need an appraisals, for the first time since 1994. In fact, the federal regulators approved a proposal to increase the threshold at which residential home sales require an appraisal.
A proposal was released in November that would increase the appraisal requirement from $250,000 to $400,000; meaning that certain home sales of $400,000 and below would no longer require an appraisal.
The rule was signed off after a year of consideration. The Fed has also given the rule change its stamp of approval, and with all three agencies signing off, the appraisal rule change will soon go into effect.
“The appraisal threshold was last changed in 1994,” the federal agencies said in a joint statement. “Given price appreciation in residential real estate transactions since that time, the change will provide burden relief without posing a threat to the safety and soundness of financial institutions.” (housingwire.com)
Furthermore, it’s important to note that the new rules do not apply to loans wholly or partially insured or guaranteed by, or eligible for sale to, a government agency or government-sponsored agency.
“It’s also important to note that the rule does not entirely exempt the relevant home sales from any type of appraisal-type action. According to the agencies, the final rule “requires institutions to obtain an evaluation to provide an estimate of the market value of real estate collateral.” (housingwire.com)