Agencies announce dollar thresholds for smaller loan exemption from appraisal requirements for higher-priced mortgage loans

The Consumer Financial Protection Bureau (CFPB), the Federal Reserve Board (FED), and Office of the Comptroller of the Currency (OCC) have announced an upcoming regulation to increase the threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans from $31,000 to $32,400, effective January 1, 2024. This means that financial institution granting mortgage loans of less than $32,400 will not need to seek a creditor’s written appraisal based on a physical visit to the creditor’s home prior to a lending agreement. The threshold will be valid until replaced by a new adjustment. The corresponding paragraphs to Statutory Instruments 12 CFR Parts 34, 226, and 1026 have been changed accordingly.