Appraisal Standards Temporarily Changed by Feds Due to COVID-19

By Shannon Martinez, Attorney in the Creditor’s Rights & Bankruptcy and Litigation Practice Groups

On April 14, 2020, the FDIC, OCC and Federal Reserve issued an interim final rule that allows lenders to close certain real estate loans without an appraisal or evaluation. The lender will have 120 days after the loan closing to obtain the appraisal. In conjunction, Fannie Mae and Freddie Mac have also issued guidelines relaxing their appraisal standards. This rule expires on December 31, 2020. While this is certainly good news for real estate closings, there are some key exceptions in the rule. This rule does not apply to loans for the acquisition, development or construction of real estate. Lenders are also required to develop procedures for estimating the collateral’s value for purposes of extending the credit and a risk mitigation strategy in the event that the appraisal reveals a much lower value than anticipated. Lenders are encouraged to review the interim final rule or contact a member of the financial services team at Saalfeld Griggs to discuss how the interim final rule may be practically adapted to facilitate timely loan closings.


Shannon Martinez is a partner in the Creditor’s Rights & Bankruptcy and Litigation practice groups. Shannon is also a member of the Financial Services and Construction industry teams. The information in this article is not intended to provide legal advice. For professional consultation, please contact Shannon at at Saalfeld Griggs PC.  503.399.1070. © 2020 Saalfeld Griggs PC