Finally, they discuss the appraisal options created by the changes in USPAP and their use in federally related transactions.
For federally related transactions,(7) the federal regulatory agencies appraisal regulations include five minimum standards for the preparation of an appraisal:
That is because commentary from the agencies and the Appraisal Standards Board indicates that the utility of the Restricted Appraisal Report format for federally related transactions is limited.
Monitor the requirements established by the agencies and the RTC regarding appraisal standards for federally related transactions and determinations of which federally related transactions will require the services of state licensed or state certified appraisers.
Maintain a national registry of state licensed and state certified appraisers qualified to perform appraisals in federally related transactions (registry).
According to the August 1992 legislatively mandated De Minimis Study prepared by the OMB, "OMB does not recommend--at this time--a de minimis level higher than $100,000 for commercial federally related transactions .
The result of the regulations has been a significant increase in the minimum reporting requirements for appraisals performed as part of federally related transactions.
However, for federally related transactions, the definition of market value as stated in the final appraisal rules of the federal financial institutions regulatory agencies must be used.
With certain exceptions for some regulatory agencies, one or more appraisal reports must be secured for all federally related transactions
, as defined by the appraisal regulations.
Title XI originally imposed a deadline of July 1, 1991, which was subsequently extended to December 31, 1992, after which all appraisals performed in connection with federally related transactions are to be performed only by state certified or licensed appraisers.
In accordance with the provisions of Title XI, the FDIC's appraisal regulations 1) identify real estate-related financial transactions that require the services of an appraiser; 2) specify which categories of federally related transactions require appraisals performed by state certified appraisers and which categories of transactions may be conducted using appraisals performed by state licensed appraisers; and 3) prescribe minimum standards for real estate appraisals performed in connection with federally related transactions.
A state certified appraiser is required for all federally related transactions of $1,000,000 or more.