State Certified Appraisers and Federally Related Transactions

A critical concept for students to understand is when a certified appraiser is legally required. Under FIRREA, any "federally related transaction"—which includes most real estate loans made by banks, savings associations, or credit unions that are regulated by a federal agency—requires an appraisal performed by a state-certified or licensed appraiser. While there are exceptions for very low-value transactions (under a certain dollar threshold, currently $400,000 for many residential loans), the general rule is that if federal money or insurance is involved, the valuation must be objective and compliant with federal standards. These certified appraisal reports must be written strictly according to the guidelines set by the ASB.