Regulatory Alerts2025-04-15 | FIL-10-2025FDIC Issues Temporary Exceptions to Appraisal Requirements in Los Angeles County as Affected by California Wildfires and Straight-line Winds
The Federal Deposit Insurance Corporation (FDIC) has issued a temporary exception to appraisal requirements for real estate-related transactions in Los Angeles County impacted by California wildfires and straight-line winds. Institutions may apply this flexibility to transactions with binding funding commitments entered between January 8, 2025, and January 8, 2028, provided the property value supports the lending decision. The exception remains valid for three years following the major disaster declaration and requires ongoing management review alongside standard FDIC supervisory examinations.
Disaster Relief
April 15, 2025
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Summary: The FDIC is providing flexibility relative to appraisal requirements for real estate-related transactions in Los Angeles County due to the California wildfires and straight-line winds. The flexibilities may be exercised by any institution underwriting a real estate-related transaction in Los Angeles County. Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-supervised financial institutions. Highlights: The FDIC is facilitating the recovery process in Los Angeles County, which was declared to be a major disaster, by temporarily easing appraisal requirements for real estate-related financial transactions under the Financial Institutions Reform, Recovery, and Enforcement Act. The exception expires three years after the date Los Angeles County was declared a major disaster. To qualify for the exception, an institution must determine that: The transaction involves real property located in the area designated as adversely affected by the major disaster. There is a binding commitment to fund the transaction 1 that was entered into on or after January 8, 2025, but no later than January 8, 2028. The value of the real property supports the institution’s decision to enter into the transaction. Transactions for which the financial institution relies on the appraisal exception must continue to be subject to review by management. The FDIC will review an institution’s reliance on the appraisal exception during regularly scheduled examinations. 1 This relief also includes loans modified during the effective period of this order.
FIL-10-2025
Attachment(s)
12 CFR Part 323 of the FDIC Rules and Regulations
Interagency Appraisal and Evaluation Guidelines, FIL-82-2010
Supervisory Expectations for Evaluations, FIL-16-2016
Major Disaster Examiner Guidance, FIL-62-2017
Appraisal Regulations: Frequently Asked Questions, FIL-62-2018
Agencies Take Action on Appraisal Requirements in an Area Affected by California Wildfires and Straight-line Winds
Federal Register Notice and Order
Related Topics
Appraisals and Other Valuation Products
Contact(s)
Division of Risk Management Supervision
Legal Division