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Financial Institution Letter

Agencies Adopt Final Rule on Certain Real Estate Transactions for Financial Institutions and Consumers Affected by the Coronavirus


The Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve System (collectively, the agencies) adopted as final the interim final rule that allows institutions supervised by the agencies to defer obtaining an appraisal or evaluation for up to 120 days after the closing of certain residential and commercial real estate loans. The agencies’ final rule helps regulated institutions to expeditiously extend liquidity to creditworthy households and businesses in light of recent strains on the U.S. economy as a result of the coronavirus disease 2019 (COVID event).

A copy of the Final Rule is available on the FDIC's website.

Statement of Applicability to Institutions with Total Assets Under $1 Billion: This Financial Institution Letter (FIL) applies to all FDIC-supervised institutions, including community banks.


  • The agencies are adopting as final the interim final rule published by the agencies on April 17, 2020, making temporary amendments to the agencies’ regulations requiring appraisals for certain real estate-related transactions. The final rule is effective upon publication in the Federal Register and through December 31, 2020.
  • The final rule adopts the deferral of the requirement to obtain an appraisal or evaluation for up to 120 days following the closing of certain residential and commercial real estate transactions, excluding transactions for acquisition, development, and construction of real estate.
  • The final rule makes one revision to the interim final rule. In response to comments received by the agencies on the interim final rule, the final rule clarifies that transactions for the acquisition, development, and construction of real estate excluded from the 120-day deferral period mean, for purposes of this rule, those loans described in the Call Report Instructions for Schedule RC-C, “Loans and Lease Financing Receivables,” Part I, "Loans and Leases," item 1.a, “Construction, land development, and other land loans.”
  • Regulated institutions are encouraged to make best efforts to obtain a credible estimate of the value of real property collateral before closing the loan and are to otherwise underwrite loans consistent with the principles in the agencies' Standards for Safety and Soundness and Real Estate Lending Standards.


FDIC-Supervised Institutions

Suggested Routing:

Chief Executive Officer
Chief Loan Officer
Compliance Officer

Last Updated: September 29, 2020