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Financial Institution Letter
Exception from Appraisal Requirements in Certain Disaster Areas in Louisiana
Regulatory Relief


The FDIC is providing flexibility relative to appraisal requirements to financial institutions in major disaster areas in Louisiana due to severe storms and flooding.

Statement of Applicability to Institutions With Total Assets Under $1 Billion: This Financial Institution Letter applies to all FDIC-supervised institutions with loans secured by real estate in the affected areas.


  • The FDIC is excepting real estate-related transactions from the appraisal requirements under the Financial Institutions Reform, Recovery, and Enforcement Act and its implementing regulations in the Louisiana parishes declared major disaster areas due to severe storms and flooding.
  • To qualify for the waiver, a financial institution must document that: (1) the transaction involves real property in a parish declared to be in a major disaster area by the President on August 14, 2016; 1(2) there is a binding commitment to fund a transaction that was entered into on or after August 14, 2016, but no later than December 31, 2017; and (3) the value of the real property supports the institution's decision to enter into the transaction. A financial institution that relies on the appraisal exception should maintain sufficient information in the loan file estimating the collateral's value to support the institution's credit decision.
  • The FDIC will monitor institutions that rely on the appraisal exception to ensure real estate-related transactions are being originated in a manner consistent with safe-and-sound banking practices.
  • The exception expires on December 31, 2017.


  • FDIC-Supervised Institutions

Suggested Routing:

  • Chief Executive Officer
  • Chief Lending Officer

Paper copies may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).

Last Updated: October 24, 2016