The Agencies’ appraisal regulations permit an institution to obtain an appropriate evaluation of real property collateral in lieu of an appraisal for transactions that qualify for certain exemptions. These exemptions include a transaction that:

• Has a transaction value less than $400,000 for residential real estate or less than $500,000 for commercial real estate
• Is a business loan with a transaction value equal to or less than the business loan threshold of $1 million, and is not dependent on the sale of, or rental income derived from, real estate as the primary source of repayment
• Involves an existing extension of credit at the lending institution, provided that:
• There has been no obvious and material change in market conditions or physical aspects of the property that threaten the adequacy of the institution’s real estate collateral protection after the transaction, even with the advancement of new monies; or
• There is no advancement of new monies other than funds necessary to cover reasonable closing costs. 

Special exemption for rural areas: An appraisal is not required, but an evaluation is, if the real property or interest in real property is located in a rural area, as defined by Regulation Z and provided by the Bureau, so long as the following criteria are met:

• The bank has contacted not fewer than 3 state certified appraisers or state licensed appraisers,
• The bank has documented that no state certified appraiser or state licensed appraiser was available within 5 business days beyond customary
• And reasonable fee and timeliness standards for comparable assignments, 
• The transaction is less than $400,000, and
• The transaction is not a high-cost mortgage transactionas defined by Regulation Z

Reference: Interagency Appraisal Guidelines, December 2010, page 11 of 45