WASHINGTON — The Comptroller of the Currency is proposing to nearly double the appraisal threshold for commercial real estate transactions to $400,000.
Currently, national banks have to obtain appraisals that meet Title XI requirements of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 for commercial real estate transactions estimated to be valued at $250,000 or above.
"The proposed threshold of $400,000 reflects increases in CRE transaction values and general indices of inflation since adoption of the existing threshold in 1994," the OCC said in a press release.
Besides transactions that are normally considered commercial real estate, the proposal also encompasses one- to four-family construction loans that do not provide permanent financing for the homebuyers.
However, the proposal excludes home construction loans that provide the buyers with permanent financing. "This approach would be consistent with other regulations and guidance that address construction loans to consumers in other contexts," according to the OCC.
The comment period ends Sept. 29.
The move was praised by banking groups, including the American Bankers Association, which had urged federal banking regulators last year to raise the threshold to $500,000.
