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Office of the Comptroller of the Currency
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Consumer Financial Protection Bureau
National Credit Union Administration
April 14, 2020
INTERAGENCY STATEMENT ON APPRAISALS AND EVALUATIONS
FOR REAL ESTATE RELATED FINANCIAL TRANSACTIONS
AFFECTED BY THE CORONAVIRUS
The Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal
Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit
Union Administration (NCUA), and the Consumer Financial Protection Bureau (CFPB), in
consultation with the state financial regulators, are issuing this interagency statement to address
challenges relating to appraisals and evaluations for real estate related financial transactions
affected by the Coronavirus Disease 2019 (referred to as COVID-19). The United States has
been operating under a presidentially declared emergency since March 13, 2020. COVID-19 has
significantly affected financial institutions and their customers, and the agencies seek to assist
financial institutions in their provision of needed services to their customers and to the general
public.
This interagency statement outlines existing flexibilities in industry appraisal standards and in
the appraisal regulations issued by the OCC, FRB, FDIC, and NCUA (agencies) and describes
temporary changes to Fannie Mae and Freddie Mac appraisal standards that can assist lenders
during this challenging time. The agencies will continue to communicate with the industry as
this situation unfolds, as appropriate.
I.

Flexibility for Physical Property Inspections

The agencies’ appraisal regulations require that appraisals be conducted in compliance with the
Uniform Standards of Professional Appraisal Practice (USPAP). While exterior and interior
inspections are commonly conducted in preparing appraisals and evaluations and can facilitate
high quality valuations, such inspections are not required by the agencies’ appraisal regulations
implementing Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act
(FIRREA). 1 Rather, as allowed by USPAP, an appraiser can determine the characteristics of a
property through, among other things, any combination of property inspection, asset records,
photographs, property sketches, and recorded media. 2
Institution management should be aware that the Appraisal Standards Board’s “2020-21
USPAP Q&A” issued March 17, 2020, indicates that when an interior inspection would
customarily be part of the scope of work, a health or other emergency condition may require an
OCC: 12 CFR part 34; FRB: 12 CFR part 208 and 12 CFR part 225; FDIC: 12 CFR part 323; and NCUA: 12 CFR
701 and 12 CFR part 722.
2
See USPAP Advisory Opinion 2.
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appraiser to make an extraordinary assumption about the interior of a property. 3 USPAP
permits this approach as long as the appraiser has a reasonable basis for the extraordinary
assumption and as long as its use still results in a credible analysis. Both desktop appraisals
and exterior-only appraisals can fulfill the requirements of USPAP as long as the analysis is
credible. 4 Interior inspections are still required, however, for certain higher-priced mortgage
loans. 5
II.

Flexibility for Appraisals of Residential Properties Underwritten to Fannie
Mae and Freddie Mac Standards

Fannie Mae and Freddie Mac (hereinafter, the GSEs) have recently issued guidance providing
temporary flexibility in the appraisal standards for loans that they purchase, including allowing
exterior-only and desktop appraisals for certain loans. 6 Specifically, the GSEs’ guidance states
that:
•

For certain qualifying principal or primary residence loans, desktop appraisals and
exterior-only appraisals will now be acceptable. For Freddie Mac, qualifying primary
residence loans are those with up to 97 percent loan-to-value (LTV). For Fannie Mae,
qualifying primary residence loans are those with an LTV within the range listed on
Fannie’s current eligibility matrix.

•

For second homes and investment properties with up to 85 percent LTV, desktop
appraisals and exterior-only appraisals will now be acceptable.

•

For limited cash-out refinances where the mortgage being refinanced is owned by the
GSE and the LTV is within the currently acceptable range, exterior-only appraisals will
now be acceptable.

In addition, lenders may sell eligible loans without an appraisal under the appraisal waiver
programs provided by the GSEs. 7 For Freddie Mac, the appraisal waiver program for lenders
is now being expanded to include certain refinancing activity, including both cash-out
refinances and no cash-out refinances. Fannie Mae already allowed lenders to waive the
See March 2020 Q&A at https://www.appraisalfoundation.org/imis/TAF/Standards/Q_As/TAF/QAs.aspx.
See USPAP Scope of Work Rule, Standard Rule 1-2, and Advisory Opinion 2.
5
Interior inspections are required for certain higher-priced mortgage loans (HPMLs) pursuant to the Interagency
HPML Appraisal Rule, implementing statutory requirements under the Truth in Lending Act, 15 U.S.C. § 1601 et
seq. See 15 U.S.C. § 1639h. This rule was issued jointly by the OCC, FRB, FDIC, NCUA, CFPB, and Federal
Housing Finance Agency (FHFA). See 78 FR 10367 (Feb. 13, 2013) and 78 FR 78520 (Dec. 26, 2013); OCC: 12
CFR Part 34, subpart G; Board: 12 CFR 225.64; NCUA: 12 CFR 722.3; CFPB: 12 CFR 1026.35(a) and (c); and
FHFA: 12 CFR 1222, subpart A. The FDIC adopted the HPML Appraisal Rule as published by the CFPB without
issuing its own regulation.
6
See https://singlefamily.fanniemae.com/media/22321/display and
https://guide.freddiemac.com/app/guide/content/a_id/1003723.
7
For additional information, see Fannie Mae Selling Guide B4-1.4-10 and Freddie Mac Selling Guide Section
5601.9, respectively, available at https://selling-guide.fanniemae.com/Selling-Guide/Origination-thruClosing/Subpart-B4-Underwriting-Property/Chapter-B4-1-Appraisal-Requirements/Section-B4-1-4-SpecialAppraisal-and-Other-Valuation/1736878771/B4-1-4-10-Appraisal-Waivers-08-07-2019.htm, and
https://guide.freddiemac.com/app/guide/section/5601.9.
3
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appraisal requirement for some refinance transactions. 8
III.

Existing Exceptions in Appraisal Regulations

The appraisal regulations issued by the OCC, FRB, and FDIC provide at least fourteen
exceptions to the requirement for an appraisal by a certified or licensed appraiser. 9 Exceptions
that lenders may find the most useful during the COVID-19 emergency for real-estate related
financial transactions include:
•

The transaction is a residential real estate transaction with a transaction value of $400,000
or less;

•

The transaction is a commercial real estate transaction with a transaction value of
$500,000 or less;

•

The transaction is a business loan that has a transaction value of $1 million or less where
the loan does not depend on the sale of, or rental income derived from, real estate as the
primary source of repayment;

•

The transaction involves an existing extension of credit at the lending institution,
provided that: 10
o There has been no obvious and material change in market conditions or physical
aspects of the property that threatens the adequacy of the institution’s real estate
collateral protection after the transaction, even with the advancement of new
monies; or

For additional information, see Fannie Mae LL 2020-04 and Freddie Mac Bulletin 2020-5, available at
https://singlefamily.fanniemae.com/media/22321/display and
https://guide.freddiemac.com/ci/okcsFattach/get/1003723_7.
9
For a comprehensive list of exceptions, see OCC: 12 CFR 34.43(a); FRB: 12 CFR 225.63(a); and FDIC: 12 CFR
323.3(a).
10
Loan modifications, extensions, or similar arrangements, such as those that may be provided in connection with
mortgage forbearances required under Sections 4022 and 4023 of the CARES Act, do not require appraisals under
the agencies’ appraisal regulations if the transaction is wholly or partially insured or guaranteed by a federal
agency or government-sponsored enterprise (GSE), such as Fannie Mae or Freddie Mac. Such transactions would
instead be subject to the valuation standards required by the agency or GSE. Relatedly, the agencies’ appraisal
regulations generally would not require an appraisal for this type of transaction, as the agencies’ appraisal
regulations do not require an appraisal for a transaction involving an existing extension of credit at the lending
institution (i.e., subsequent transactions) if there is not a new advance of funds, other than funds necessary to cover
reasonable closing costs. Rather, an evaluation is permitted in lieu of an appraisal under those circumstances. OCC:
12 CFR § 34.43(a)(7),(b); FRB: 12 CFR § 225.63(a)(7),(b); FDIC: 12 CFR § 323.3(a)(7),(b); and NCUA: 12 CFR §
722.3(a)(1) also permit an evaluation for extensions of credit at the lending institution if there has been no obvious
and material change in market conditions or physical aspects of the property that threatens the adequacy of the real
estate collateral protection after the transaction, even with advancement of new funds. Note additionally that a loan
modification that only entails a decrease in the interest rate or a single extension of a limited or short-term nature
would not be viewed as a subsequent transaction, and as such, not require an evaluation. Interagency Appraisal and
Evaluation Guidelines. See 75 FR 77450, at 77464-77465 (December 10, 2010), available at https://occ.gov/newsissuances/federal-register/2010/75fr77450.pdf.
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o There is no advancement of new monies, other than funds necessary to cover
reasonable closing costs;
•

The transaction is wholly or partially insured or guaranteed by a US government agency
or US government sponsored agency;

•

The transaction either:
o Qualifies for sale to a U.S. government agency or government sponsored agency;
or
o Involves a residential real estate transaction where the appraisal conforms to the
Fannie Mae or Freddie Mac appraisal standards.

In addition, on April 14, 2020, the FDIC, FRB, and OCC issued an interim final rule
temporarily amending their appraisal regulations to provide that the completion of appraisals
and evaluations required under the agencies’ appraisal regulations may be deferred by a
regulated institution for up to 120 days from the date of closing. The temporary deferrals apply
to all residential 11 and commercial real estate secured transactions, including loans for new
money or refinancing transactions, but excluding transactions for acquisition, development,
and construction of real estate, and will be effective upon publication in the Federal Register.
The deferred appraisals and the interim final rule will sunset on December 31, 2020.
The appraisal regulations issued by the NCUA provide nine exceptions to the appraisal
requirements for an appraisal by a certified or licensed appraiser. 12 Exceptions that institutions
may find the most useful during the COVID-19 emergency for real-estate related financial
transactions include:
•

The transaction is a residential real estate transaction with a transaction value of less
than $250,000; 13

•

The transaction is a residential real estate transaction with a transaction value greater than
$250,000, but less than $1 million, and the portion of the transaction value that is insured
or guaranteed by a U.S. government agency or U.S. government sponsored agency is
$250,000 or more;

Under the Equal Credit Opportunity Act (ECOA) and its implementing Regulation B, creditors are generally
required to provide applicants for first-lien loans on a dwelling with copies of appraisals, as well as other written
valuations, developed in connection with an application prior to the consummation of the transaction. See 15 U.S.C.
1691(e) and Regulation B, 12 CFR 1002.14 (“ECOA Valuations Rule”). Nothing in ECOA or Regulation B
addresses the type of post-consummation valuation contemplated in the agencies April 14, 2020 interim final
rule. The agencies, therefore, will not take enforcement actions against institutions under the ECOA Valuations
Rule for post-consummation valuations performed pursuant to the agencies’ April 14 interim final rule.
Nevertheless, the agencies encourage institutions to provide borrowers with copies of such post-consummation
valuations as promptly as practicable upon completion.
12
For a comprehensive list of exceptions, see 12 CFR 722.3(a) and (b).
13
The residential real estate threshold for the NCUA is currently $250,000 and the NCUA recently issued a notice
of proposed rulemaking to raise the threshold to $400,000.
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•

The transaction is a commercial real estate transaction with a transaction value of less
than $1,000,000; 14

•

The transaction involves an existing extension of credit at the lending credit union,
provided that:
o There is no advancement of new monies, other than funds necessary to cover
reasonable closing costs; or
o There has been no obvious and material change in market conditions or physical
aspects of the property that threatens the adequacy of the credit union's real
estate collateral protection after the transaction, even with the advancement of
new monies;

•

The transaction either:
o Qualifies for sale to a U.S. government agency or U.S. governmentsponsored agency; or
o Involves a residential real estate transaction in which the appraisal
conforms to the Fannie Mae or Freddie Mac appraisal standards applicable
to that category of real estate.

The agencies encourage financial institutions to make use of these exceptions. The use of an
existing appraisal or evaluation for subsequent transactions may be particularly relevant during
the COVID-19 emergency. A financial institution can use an existing evaluation or appraisal
instead of obtaining a new appraisal for a subsequent transaction in certain circumstances if the
institution can confirm that the evaluation or appraisal remains valid.
The passage of time is a criterion that institutions can consider when determining whether an
appraisal remains valid. If the institution determines that the appraisal still reflects market
value, the institution may rely on the appraisal based on an acceptable level of risk as
evidenced by a loan’s LTV ratio and other underwriting criteria.
The agencies understand that it may be appropriate for institutions to have different criteria for
assessing the validity of an appraisal or evaluation for purposes of subsequent transactions
during major disasters or other emergencies. The institution’s determination of the validity of
existing appraisals and evaluations used for subsequent transactions conducted during the
COVID-19 emergency will not be subject to examiner criticism if it is consistent with safe and
sound practices.

The NCUA appraisal regulations for commercial real estate set a $1 million threshold for all commercial loans.
See 12 CFR 722(b)(1).

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