An exemption from certain appraisal requirements for higher-priced mortgage loans will apply to loans of $31,000 or less in 2023 under a rule change announced by the Federal Reserve Board, Consumer Financial Protection Bureau (CFPB), and Office of the Comptroller of the Currency (OCC).
The agencies note that special appraisal requirements for higher-priced mortgage loans, including that creditors obtain a written appraisal based on a physical visit to the interior of the home before making a higher-priced mortgage loan, are required under Truth in Lending Act (Regulation Z) changes implemented under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). The exemption threshold, originally set at $25,000, is adjusted annually to reflect increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W.
Under the rule change, announced Thursday and set to take effect Jan. 1, the exemption threshold is rising $2,500 from the 2022 threshold amount ($28,500). The rule change is slated for publication in the Federal Register.