The Federal Deposit Insurance Corporation (FDIC) in conjunction with the Office of Comptroller of the Currency and the Federal Reserve has published, in its final form, a rule that would increase the appraisal exception from $250,000 to $400,000. This marks the first time since 1994 that the appraisal threshold will rise.
The new $400,000 threshold is based on review of what a 1994 $250,000 property would be worth today. Under review were the Case-Shiller Index, the Federal Housing Finance Agency’s Housing Price Index, and for a look at inflation the Consumer Price Index (CPI). The agencies ended on a conservative number with $400,000 as even CPI marked $250,000 in 1994 as $429,240 in 2019 (almost $200,000 less than the other two measures).
The Appraisal Exception is only applicable for specific types of loans. For loans sold to or guaranteed by FHA, HUD, VA, Fannie Mae, or Freddie Mac this exception would not apply.
