WASHINGTON — In the wake of three major hurricanes, the federal banking and credit union regulators are waiving normal appraisal requirements so financial institutions can make loans to help with rebuilding and recovery efforts.
The waiver will ensure that a shortage of appraisers, which could delay appraisals, will not slow down recovery efforts in areas most affected by Hurricanes Harvey, Irma and Maria.
The order — issued by the Federal Reserve Board, Federal Deposit Insurance Corp., National Credit Union Administration and Office of the Comptroller of the Currency — allows banks and credit unions to extend credit for real estate transactions without an appraisal if lenders document the property value to support the loan.
"The exceptions apply to transactions in areas of Florida, Georgia, Puerto Rico, Texas, and the U.S. Virgin Islands and expire three years after the date the president declared each area a major disaster," according to a joint press release by the agencies.
Under the order, appraisals are not required if a property is located in a major disaster area, a binding commitment is in place to fund the transaction within 36 months of when the area was declared a major disaster areas, and "the value of the real properties support the institutions' decisions to enter into the transactions."