WASHINGTON - Banks in flood areas may now begin making loans without first getting appraisals on the real estate pledged as collateral, the five federal banking agencies announced Thursday.

"The exemption is necessary because the disruption of real estate markets in the flood areas interferes with the ability of institutions to obtain appraisals that meet the requirements of federal law and regulations," the agencies said in a statement.

The relaxed rules will remain in effect until 1996 and cover parts of nine states declared major disaster areas by President Clinton.

The states are Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Wisconsin.

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