The threshold will increase from $32,400 to $33,500 for higher-priced mortgage loans that are subject to special appraisal requirements, the federal banking and consumer financial protection agencies said Friday.
The new threshold takes effect Jan. 1.
According to the agencies (the Consumer Financial Protection Bureau [CFPB], the Federal Reserve Board, and the Office of the Comptroller of the Currency [OCC]), the threshold is based on the 3.4% annual percentage increase in the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers, (CPI-W), as of June 1, 2024.
Special appraisal requirements for higher-priced mortgage loans were added in 2010 to the Truth in Lending Act from the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
That provision included that creditors obtain a written appraisal based on a physical visit to the interior of the home before making a higher-priced mortgage loan. The rules implementing these requirements contain an exemption for loans of $25,000 or less, adjusted annually to reflect CPI-W increases – now to be $33,500.