The federal banking agencies recently issued Frequently Asked Questions (FAQs) on appraisal and valuation functions in response to recent questions they received on their real estate appraisal regulations and guidelines. The FAQs replace the 2005 FAQs on appraisal regulations. The agencies involved are the Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board (Board) and Office of the Comptroller of the Currency (OCC).
The banking agencies advise that the FAQs assemble previously communicated policy and interpretations and do not introduce new policy or guidance. The agencies also state that the FAQs focus on, and should be reviewed in conjunction with:
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their appraisal regulations issued under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (OCC: 12 CFR Part 34, subpart C; Board: 12 CFR Part 225, subpart G and 12 CFR Part 208, subpart E; FDIC: 12 CFR Part 323, subpart A);
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their real estate lending standards (OCC: 12 CFR Part 34, subpart D; Board: 12 CFR Section 208.51 and Part 208, Appendix C; FDIC: 12 CFR Part 365, subpart A, Appendix A);
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the December 2010 Interagency Appraisal and Evaluation Guidelines (the “Valuation Guidelines”); and
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the March 2016 Interagency Advisory on the use of Evaluations in Real Estate-Related Financial Transactions.
The banking agencies note that while the new FAQs incorporate some of the FAQs from 2005, many of the 2005 questions are directly addressed in the Valuation Guidelines and therefore are not included in the new FAQs.
