As of Oct. 9, 2019, certain home sales of $400,000 and under no longer require an appraisal.
Under previous rules that have been in place since 1994, appraisals were not required on all home sales of $250,000 and below, but last year, federal regulators proposed increasing the appraisal threshold for the first time in 25 years.
The Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve released a proposal to increase the appraisal requirement from $250,000 to $400,000, citing the home price appreciation that’s taken place since the threshold was last increased in 1994. The agencies all approved the rule. That means that certain home sales of $400,000 and below will no longer require an appraisal as of Oct. 9, 2019.
The loans that are affected by this rule are either held in portfolio by lenders or sold to secondary market investors via the private-label securitization market.
Contributed by Carolyn Horvath Oak Creek Capital, LLC https://oakcreekcapitalpartners.com/