--- kind: "section" citation: "12 U.S.C. § 3356" title: "12" title_heading: "Banks and Banking" number: "3356" heading: "Exemption from appraisals of real estate located in rural areas" release: "119-102" url: "https://uscodex.org/usc/12/3356" units: - "Chapter 34A — Appraisal Subcommittee of Federal Financial Institutions Examination Council" --- # §3356. Exemption from appraisals of real estate located in rural areas - (a) **Definitions—** In this section— - (1) the term “mortgage originator” has the meaning given the term in [section 1602 of title 15](/usc/15/1602.md); and - (2) the term “transaction value” means the amount of a loan or [extension of credit](/usc/12/1843.md?p=c-14-F-iv), [including](/usc/12/25b.md?p=a-3) a loan or [extension of credit](/usc/12/1843.md?p=c-14-F-iv) that is part of a pool of loans or extensions of [credit](/usc/12/5481.md?p=7). - (b) **Appraisal not required—** Except as provided in [subsection (d)](#d), notwithstanding any other provision of law, an appraisal in connection with a [federally related transaction](/usc/12/3350.md?p=4) involving real property or an interest in real property is not required if— - (1) the real property or interest in real property is located in a rural area, as described in [section 1026.35(b)(2)(iv)(A) of title 12, Code of Federal Regulations](/cfr/12/1026.35.md?p=b-2-iv-A); - (2) not later than 3 days after the date on which the Closing Disclosure Form, made in accordance with the final rule of the [Bureau](/usc/12/5481.md?p=2) of [Consumer](/usc/12/5481.md?p=4) Financial Protection entitled “Integrated [Mortgage](/usc/12/1707.md?p=a) Disclosures Under the [Real Estate](/usc/12/1715z–20.md?p=b-2) Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z)” (78 Fed. Reg. 79730 (December 31, 2013)), relating to the [federally related transaction](/usc/12/3350.md?p=4) is given to the [consumer](/usc/12/5481.md?p=4), the [mortgage originator](#a-1) or its agent, directly or indirectly— - (A) has contacted not fewer than 3 [State](/usc/12/1707.md?p=d) certified appraisers or [State](/usc/12/1707.md?p=d) licensed appraisers, as applicable, on the [mortgage originator](#a-1)’s approved appraiser list in the market area in accordance with [part 226 of title 12, Code of Federal Regulations](/cfr/12/part226.md); and - (B) has documented that no [State](/usc/12/1707.md?p=d) certified appraiser or [State](/usc/12/1707.md?p=d) licensed appraiser, as applicable, was available within 5 [business days](/usc/12/5002.md?p=5) beyond customary and reasonable fee and timeliness standards for comparable appraisal assignments, as documented by the [mortgage originator](#a-1) or its agent; - (3) the [transaction value](#a-2) is less than $400,000; and - (4) the [mortgage originator](#a-1) is subject to oversight by a Federal [financial institutions](/usc/12/1715k.md?p=h-1-C) regulatory [agency](/usc/12/1422.md?p=12). - (c) **Sale, assignment, or transfer—** A [mortgage originator](#a-1) that makes a loan without an appraisal under the terms of [subsection (b)](#b) shall not sell, assign, or otherwise transfer legal title to the loan unless— - (1) the loan is sold, assigned, or otherwise transferred to another [person](/usc/12/5481.md?p=19) by reason of the bankruptcy or failure of the [mortgage originator](#a-1); - (2) the loan is sold, assigned, or otherwise transferred to another [person](/usc/12/5481.md?p=19) regulated by a Federal [financial institutions](/usc/12/1715k.md?p=h-1-C) regulatory [agency](/usc/12/1422.md?p=12), so long as the loan is retained in portfolio by the [person](/usc/12/5481.md?p=19); - (3) the sale, assignment, or transfer is pursuant to a merger of the [mortgage originator](#a-1) with another [person](/usc/12/5481.md?p=19) or the acquisition of the [mortgage originator](#a-1) by another [person](/usc/12/5481.md?p=19) or of another [person](/usc/12/5481.md?p=19) by the [mortgage originator](#a-1); or - (4) the sale, loan, or transfer is to a wholly owned [subsidiary](/usc/12/24a.md?p=g-1) of the [mortgage originator](#a-1), provided that, after the sale, assignment, or transfer, the loan is considered to be an asset of the [mortgage originator](#a-1) for regulatory accounting purposes. - (d) **Exception—** [Subsection (b)](#b) shall not apply if— - (1) a Federal [financial institutions](/usc/12/1715k.md?p=h-1-C) regulatory [agency](/usc/12/1422.md?p=12) requires an appraisal under section [225.63(c)](/cfr/12/225.63.md?p=c), [323.3(c)](/cfr/12/323.3.md?p=c), [34.43(c)](/cfr/12/34.43.md?p=c), or [722.3(e)](/cfr/12/722.3.md?p=e) of title 12, Code of Federal Regulations; or - (2) the loan is a high-cost [mortgage](/usc/12/1707.md?p=a), as defined in [section 1602 of title 15](/usc/15/1602.md). - (e) **Anti-evasion—** Each Federal [financial institutions](/usc/12/1715k.md?p=h-1-C) regulatory [agency](/usc/12/1422.md?p=12) shall ensure that any [mortgage originator](#a-1) that the Federal [financial institutions](/usc/12/1715k.md?p=h-1-C) regulatory [agency](/usc/12/1422.md?p=12) oversees that makes a significant amount of loans under [subsection (b)](#b) is complying with the requirements of [subsection (b)(2)](#b-2) with respect to each loan. ## Source credit (Pub. L. 101–73, title XI, § 1127, as added Pub. L. 115–174, title I, § 103, May 24, 2018, 132 Stat. 1299.)