On October 16, 2018, the OCC, Federal Reserve, and FDIC published new FAQs regarding appraisals and evaluations for real estate transactions. These FAQs clarify existing regulatory requirements and guidance that is found in two previous issuances:the 2010 Interagency Appraisal and Evaluation Guidelines and the 2016 Interagency Advisory on Use of Evaluations in Real Estate-Related Financial Transactions.
The agencies make it clear that these FAQs are not official rules or regulations, but rather are the agencies’ “interpretations of existing rules and guidance based on the facts and circumstances presented in the questions.”
In conjunction with the issuance of these new FAQs, the agencies are rescinding the prior 2005 FAQs. While some of the questions from the 2005 FAQs are incorporated into the new 2018 FAQs, many of the FAQs from the 2005 version have been removed entirely as they were addressed in the 2010 Interagency Appraisal and Evaluation Guidelines.
The new FAQs contain a total of 23 questions and answers and cover the following topics:
Regulatory and statutory requirements relating to appraisals and evaluations.
Review of appraisals and evaluations by financial institutions.
Exemptions in the appraisal rule concerning abundance of caution, use of existing appraisals in subsequent transactions, and qualifying business loans.
Development of appraisals and evaluations.
The full Interagency Appraisal FAQs can be found here.