ComplianceMountainSeed News

In the News: FDIC Proposes to Raise CRE Evaluation Limit

By July 24, 2017 January 21st, 2020 No Comments
CRE Evaluation

The FDIC proposed to raise the threshold for ordering an evaluation from $250,000 to $400,000 on commercial real estate properties, yesterday July 19th. Many have been raising concerns about how long it takes and how costly it is to complete a real estate transaction, so the Federal Reserve, FDIC, and OCC issued a joint press release proposing a new threshold for CRE evaluations. They hope with these new regulations less appraisals will be required and it will not impact financial institutions’ “safety and soundness.”

 

In the Economic Growth and Regulatory Paperwork Reduction Act review process, industry professionals noted “that the current exemption level had not kept pace with price appreciation in the commercial real estate market.”

 

Here are the quick and fast details you need to know about the pending changes:

What was the old limit?

Your bank or credit union can only order evaluations on commercial properties up to $250,000.

 

What will the new CRE Evaluation limit be?

You will be able to order a CRE evaluation on properties up to $400,000.

 

What would this mean for you?

The good news for you would be you can now deliver quicker evaluations on properties that are even higher in value. Appraisals wouldn’t be needed for commercial properties until they exceed the $400,000 mark. As most of us know, “evaluations are less detailed than appraisals, do not require completion by a state licensed or certified appraiser, and provide a market value estimate of the real estate pledged as collateral.”

 

How can we help?

Did you know we offer commercial evaluations for a flat fee of only $1,440, a quick turn time of 15 days, and it includes a review? That way you can rest easy knowing your evaluation and review has been completed by a licensed commercial real estate appraiser. Get in touch with our team to learn more and place your first order today.

 

Still have questions? Let us know. We’d be happy to talk through your appraisal process with you and we’ll be sure to let you know as soon as these regulations pass.

 

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Click here to read the full notice from the FDIC.