More Homes to Qualify for Appraisal Exemption

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.