Interagency guidelines for real estate lending policies

3 Extensions of credit secured by real estate, whether subprime or otherwise, are subject to the Interagency Guidelines for Real Estate Lending Policies, which establish supervisory Loan-to-Value (LTV) limits on various types The guidelines in 12 CFR 34, subpart D, appendix A, "Interagency Guidelines for Real Estate Lending," assist banks in the formulation and maintenance of real estate lending policies that satisfy the requirements of the regulation and are comprehensive, consistent with safe and sound banking, and reviewed and approved by the board at least (d) Interagency guidelines. The real estate lending policies adopted pursuant to this section should reflect consideration of the Interagency Guidelines for Real Estate Lending Policies (contained in appendix C of this part) established by the Federal bank and thrift supervisory agencies. The real estate lending policies adopted pursuant to this section should reflect consideration of the Interagency Guidelines for Real Estate Lending Policies established by the Federal bank and thrift supervisory agencies. Federal savings associations and service corporations are required to establish and maintain loan documentation practices that: LOAN WORKSHEET #4 - REAL ESTATE LENDING . Nrf14WK04 1 Texas Department of Banking (6/00) Real estate loans are borrowings for the purpose of buying, improving, or holding real property or leasehold estates. Repayment is expected from the sale of the property, its net operating income, The guidance reminds institutions that the 1992 Interagency Guidelines for Real Estate Lending Policies (Guidelines) and the supervisory LTV limits apply to these transactions. The guidance also outlines some of the other controls the agencies expect institutions to have in place when involved in this field of lending. Appendix C to Part 208—Interagency Guidelines for Real Estate Lending Policies The agencies' regulations require that each insured depository institution adopt and maintain a written policy that establishes appropriate limits and standards for all extensions of credit that are secured by liens on or interests in real estate or made for the purpose of financing the construction of a building This booklet addresses the risks inherent in commercial real estate lending, which comprises acquisition, development, and construction financing and the financing of income-producing real estate. The booklet also discusses prudent risk management and regulatory requirements. Applicability establish for real estate lending. The Interagency Guidelines contain a table that provides the maximum real estate LTV limits established by other Federal banking regulators (see Attachment I). FCA examiners should carefully evaluate FCS board-approved underwriting standards considering the limits used by other Federal banking regulators. I urge you to implement the best practices in the attached guidelines. Your board of directors is responsible for reviewing and adopting policies and procedures that establish and maintain an effective, independent real estate appraisal and evaluation program for all of your credit union's lending functions. Subchapter B - REGULATIONS AND STATEMENTS OF GENERAL POLICY Part 365 - REAL ESTATE LENDING STANDARDS Subpart A - Real Estate Lending Standards Appendix A to Subpart A of Part 365 - Interagency Guidelines for Real Estate