Shopping Cart
Welcome,   My Account

Evaluations

There are four categories of real estate related financial transactions engaged in by federally regulated financial institutions that do not require a USPAP-compliant appraisal performed by a state-licensed or state-certified appraiser:

  1. Commercial real estate (CRE) transactions with a transaction value less then $500,000
  2. Any real estate related financial transaction with a transaction value less than $250,000
  3. Qualified business loans with a transaction value less than $1M – These are generally owner-occupied business loans where a lien on the real estate is taken in addition to other collateral (PP&E, receivables, owners’ personal real property, etc.)
  4. Subsequent transactions (i.e., refinances) where there is no advancement of new monies (other than for closing costs) and there has been no material change in the market conditions affecting the real property since the last transaction. 

In most states, a state-licensed or state-certified real estate appraiser is required to comply with USPAP when developing an opinion of the value of real estate, as is required by the IAEG.  Many financial institutions do not want a USPAP-compliant appraisal when they are permitted to use non-USPAP compliant evaluations.  Instead of using the most competent and qualified professional to obtain a market value opinion, financial institutions go to other non-appraiser professionals (i.e., internal bank staff, financial analysts, accountants, brokers/salespersons, etc.) to obtain real estate valuation information.  This results in greater risk to the banking system and lost business for appraisers.

The Appraisal Institute (AI) will provide government relations assistance to AI Chapters seeking to change state law to allow certified and licensed appraisers to provide evaluations without complying with USPAP when such is permitted by federal law or regulation provided no such legislation prohibits appraisers to reference appraisal-related designations when performing such services.  AI Professionals providing these services shall comply with the AI Standards of Professional Appraisal Practice and the Code of Professional Ethics. 

Florida Evaluation Law

Georgia Evaluation Appraisal Law

Illinois Evaluation Law

Illinois Evaluation Guidance

Indiana Evaluation Law

Tennessee Attorney General Advisory Opinion regarding Evaluations

Tennessee Evaluation Law

Tennessee Evaluation Law FAQs

Texas Proposed CRE Evaluation Regulations

AI Comments on Proposed Regulations

Virginia Evaluation Law (2017)

Virginia Evaluation Law Update (2018)

Pop up content here.

Agree Disagree
close (X)