The Office of the Comptroller of the Currency, the FDIC and the Board of Governors of the Federal Reserve System (collectively, the "Agencies") adopted a new rule that will increase the threshold for commercial real estate transactions. The new rule will raise the threshold for an appraisal on properties from $250,000 to $500,000.

In accordance with the rule, the Agencies will no longer require appraisals for commercial real estate transactions below the $500,000 threshold. Instead, such transactions will be subject to an evaluation, which is not required to comply with Uniform Standards of Professional Appraiser Practices in order to provide a market value estimate of the real estate pledged as collateral. The rule stipulates that applicable transactions include all real estate-related financial transactions, except for those that are secured by a single one-to-four-family residential property.

The final rule will become effective upon its publication in the Federal Register.

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