The federal panel that oversees state real estate appraisal programs is set to meet virtually in open session Wednesday to consider a request to extend for two years a commercial real estate (CRE) appraisal waiver granted to the state of North Dakota that is currently set to expire Aug. 7.
The Federal Financial Institutions Examination Council (FFIEC) Appraisal Subcommittee (ASC) in July 2019 approved temporary waiver relief until Aug. 7, 2020, for residential real estate transactions under $500,000 and commercial real estate transactions under $1 million. With federal regulators’ actions last year raising the residential real estate appraisal threshold to $400,000, the residential waiver for North Dakota expired last December (as the relief order stipulated would happen), but the commercial real estate appraisal waiver remains until Aug. 7.
As noted in the request by North Dakota Gov. Doug Burgum, cosigned by bank and credit union trade leaders, the commercial real estate appraisal threshold for credit unions was raised last year to $1 million. Federal banking regulators have meanwhile set a threshold of $500,000.
One of the conditions set in last year’s waiver was that the state work with stakeholders, including the state’s appraiser board, to identify potential solutions to appraiser scarcity and appraisal delays. In their letter to the ASC, however, the governor and other signers said that while solutions were being sought to address appraiser scarcity, “no lasting effect has been realized to date, and the Coronavirus Disease (2019 COVID19) pandemic effectively halted all work on the issue for most of 2020.”
A May survey of lenders in the state showed little change in appraiser availability and appraisal turn time, the requesters noted, while more recent conversations suggest that turn times are trending longer, in part due to refinancings.
In its own letter, the North Dakota Real Estate Appraiser Qualifications & Ethics Board urged against extension. “A July 2020 survey of commercial/ag appraisers demonstrates a waiver extension is not appropriate or necessary,” the board’s letter states. “Further, more than 85% of the appraisers stated the waiver extension would make it less likely they will train a new appraiser who wants to enter the profession in the next year. The requested waiver extension then would also be counter-productive to our common goal of ensuring the long-term availability of qualified, competent appraisers providing timely appraisal services across North Dakota.”
The board urged that the ASC ”put the appraiser waiver behind us by denying the extension request, allowing stakeholders to focus on collaboration to ensure the long-term availability of qualified, competent appraisers to provide timely appraisal services across North Dakota.”
The ASC’s July 29 meeting is open and will be viewable online at 4 p.m. ET.