Printer Friendly

FSA rule would decrease appraisal assignments.

The Farm Service Agency of the Rural Housing Service has proposed revisions to appraisal regulations governing real estate and chattel appraisals under its Direct Farm Loan Programs. The revisions include raising the dollar threshold for real estate appraisals in partial release situations, and allowing the Agency to release real estate security without appraising the retained real estate in some cases.

FSA proposes to remove the requirement for obtaining a real estate or chattel appraisal as part of the application process. Under existing regulations, when real estate is to be taken as security, FSA usually obtains the appraisal by contracting with a qualified appraiser, prior to approval of a loan. Chattel appraisals are completed by FSA employees who have been adequately trained and delegated chattel appraisal authority. The proposed rule will allow FSA to approve loans with the condition that an acceptable appraisal, which reflects at least adequate collateral for the loan, will be obtained before the loan is closed. Currently, the FSA requires an appraisal prior to funding, which can take over a year to obtain, at which point another appraisal is required anyway. The costs savings from avoiding multiple appraisals on a single project was cited as a major reason for the proposal.

Other cost-saving changes include the proposal that the Agency not require a real estate appraisal completed by a certified general appraiser when real estate is used to secure an operating loan (OL) of less than $50,000. This action will affect less than 5 percent of the OLs processed per year, or approximately 720 applicants. In loan servicing, the Agency will increase the dollar threshold for requiring a certified real estate appraisal from $10,000 to $25,000 when considering partial releases, subordinations, exchanges, or other real estate servicing actions.

The FSA is requesting comments on this rule through October 20. Comments may be sent to the Farm Service Agency, U.S. Department of Agriculture, Farm Loan Programs, Loan Servicing and Property Management Division, Attention: Director, 1400 Independence Avenue, SW., STOP 0523, Washington, DC 20250-0523; or by visiting

For more information, contact Michael Cumpton at
COPYRIGHT 2003 The Appraisal Institute
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2003 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Industry And Institute News
Publication:Valuation Insights & Perspectives
Date:Jun 22, 2003
Previous Article:Appraisal Institute continues international work.
Next Article:Call for papers on institutional RE investment.

Related Articles
Scope of Work and Range of Services.
ASB plans for 2002. (Industry and Institute News).
Coalition panel to urge FSA to freeze stock loss-booking rule.
Appraisal standards and contaminated property valuation. (Environment and the Appraiser).
Scope of Work: Expanding Your Range of Services.
Changes to USPAP for the 2004 edition.
Tools of the trade: member and industry resources abound at the Appraisal Institute.
Contracts for appraisal services--know what you're signing.
Appraisal Standards Board adopts revisions to USPAP.
Scope of Work Rule explained in teleconference, book.

Terms of use | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters