FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act)
The 1989 federal law that established the modern appraisal regulatory framework, requiring state licensing of appraisers and USPAP compliance for all federally related real estate transactions.
Enacted in response to the savings and loan crisis, FIRREA created the Appraisal Subcommittee (ASC) to oversee state appraiser regulatory programs, mandated that federally related transactions above the de minimis threshold require an appraisal by a state-licensed or certified appraiser, and established The Appraisal Foundation as the source of standards (USPAP) and minimum qualification criteria. The current de minimis threshold is $400,000 for most residential transactions (increased from $250,000 in 2019). Transactions below this threshold may use an evaluation instead of a full appraisal.
Related Terms
Uniform Standards of Professional Appraisal Practice (USPAP)
USPAPThe nationally recognized ethical and performance standards for the appraisal profession, established by The Appraisal Foundation.
The Appraisal Foundation
The Congressionally authorized organization that sets appraisal standards (USPAP) and minimum appraiser qualification criteria.
Evaluation
A valuation of real property that does not require a state-licensed or certified appraiser, permitted for federally related transactions below the de minimis threshold.
De Minimis Threshold
The transaction value below which a federally related real estate transaction does not require an appraisal by a licensed or certified appraiser.
More in Legal & Regulatory
View allDodd-Frank Act (Appraisal Provisions)
The 2010 federal financial reform law that included significant appraisal provisions: appraiser independence requirements, AMC registration, customary and reasonable fee mandates, and prohibition of BPOs for origination..
Appraiser Independence
The legal requirement that appraisers must be free from improper influence, coercion, or pressure from parties with a financial interest in the transaction outcome.
Competency Rule
A USPAP rule requiring that an appraiser must have the knowledge and experience necessary to complete an assignment competently, or must take steps to acquire it before accepting the assignment..
USPAP Ethics Rule
The USPAP rule establishing requirements for appraiser conduct, management, confidentiality, and record keeping.