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FDIC Approves Rule On High-Risk Mortgage Appraisals

Posted on 1/16/2013

The FDIC Board yesterday approved a joint final rule under the Dodd-Frank Act that will establish new appraisal requirements for "higher-risk mortgage loans." Mortgage loans secured by a consumer's home with interest rates above a certain threshold are considered higher-risk under Dodd-Frank.

The rule will require creditors making such loans to use a licensed or certified appraiser to prepare a written report based on a physical inspection of the property's interior. It also will mandate that creditors disclose information about the appraisal's purpose and provide consumers with a free copy of the appraisal report.

Creditors also will have to obtain an additional appraisal at no cost to the consumer for a home-purchase higher-risk mortgage loan if the seller acquired the property for a lower price during the previous six months. The requirement is intended to address fraudulent property-flipping by seeking to ensure that the value of the property used as loan collateral legitimately increased.
The joint rule will be effective January 18, 2014.

To view the final rule visit:

To view an FDIC staff memo on the rule visit:

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