For the first time in 25 years, federal regulators have increased the value limit under which buyers can obtain an exemption for receiving an appraisal. Instead, homes worth $400,000 or less will be subject to an evaluation, rather than an appraisal.
This is a large increase from the previous limit of only $250,000. Price appreciation in residential real estate since 1994, when this threshold was last set, has been quite significant. This shift in threshold will provide burden relief without posing a threat to the safety and soundness of banks and lenders.
Unfortunately this exemption will not apply to homes purchased using financing insured by a government run or sponsored agency. These agencies include FHA, HUD, VA, Fannie Mae & Freddie Mac.