NCUA proposal: Commercial Real Estate
The NCUA Board issued a proposed rule this week that would increase the threshold below which appraisals would not be required for non-residential real estate transactions from $250,000 to $1 million. For transactions that would be exempted, federally insured credit unions would still be required to obtain a written estimate of market value of the real estate collateral that is consistent with safe and sound lending practices.
The $1 million threshold would exempt an additional 39 percent of commercial real estate transactions, while still covering almost 90 percent of the total dollar volume of such transactions.
After the meeting, CUNA Chief Advocacy Officer Ryan Donovan said, “CUNA commends NCUA on its action to raise the non-residential real estate appraisals threshold, and looks forward to commenting on the proposal.”
The proposed rule would also: (a) restructure the regulation to clearly indicate when a written estimate of market value, an appraisal conducted by a state-licensed appraiser, or an appraisal conducted by a state certified appraiser is required; (b) implement a provision of S. 2155 exempting from the appraisal requirements real estate transactions where the property is located in a rural area, valued below $400,000, and no state certified or licensed appraiser is available; and (c) make conforming amendments to the definitions section. Click here for details.