The $34,200 Appraisal Exemption: What 2026's Higher-Priced Mortgage Threshold Does and Doesn't Do

Most people who buy a home with a mortgage will have it appraised. Far fewer know that a small group of loans, called higher-priced mortgage loans, comes with its own extra appraisal rules under federal law. Those extra rules have a dollar cutoff, and for 2026 it is $34,200.

The Consumer Financial Protection Bureau, the Federal Reserve Board and the Office of the Comptroller of the Currency announced on Dec. 15, 2025 that the threshold would rise from $33,500 to $34,200, effective Jan. 1, 2026. The increase follows the 2.1% annual rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as of June 1, 2025.

The number is easy to misread. It is not a level below which homes skip appraisals. It is a narrow exemption from one specific set of federal rules, and many borrowers whose loans fall under it will still get an appraisal or another valuation.

What a higher-priced mortgage loan is

Under the Truth in Lending Act rules in Regulation Z, section 1026.35, a closed-end loan secured by a borrower's principal dwelling is a higher-priced mortgage loan when its annual percentage rate is well above the average prime offer rate, a weekly benchmark for prime borrowers. The gap that triggers the label is 1.5 percentage points for most first-lien loans, 2.5 points for first-lien jumbo loans and 3.5 points for subordinate liens.

In practice, these loans tend to go to borrowers with weaker credit, smaller down payments or unusual properties, and to buyers of lower-priced homes, where fixed costs push the APR up.

The special appraisal rules

The Dodd-Frank Act added appraisal protections for these loans. When they apply, the lender generally must:

• Get a written appraisal from a state-certified or state-licensed appraiser who physically visits the interior of the home.
• Get a second appraisal, at no cost to the borrower, in certain quick resales. This covers a seller who bought the home within the past 180 days and is now selling it for more than 10% above their price if they bought within 90 days, or more than 20% above if they bought 91 to 180 days earlier. This is meant to catch inflated "flip" prices.
• Tell the borrower within three business days of applying that an appraisal will be done and that they can hire their own appraiser at their own expense.
• Give the borrower a free copy of each appraisal at least three business days before closing.

What the $34,200 exemption does

The rules exempt several kinds of loans, including qualified mortgages, reverse mortgages, temporary construction loans, bridge loans of 12 months or less, and some manufactured-home loans. They also exempt smaller loans. For a loan with a principal of $34,200 or less in 2026, the lender does not have to follow these special higher-priced appraisal requirements.

That size of loan is uncommon for a home purchase, but it does come up. Examples include buying a low-cost home in a rural area or a small town, buying some manufactured homes, or taking a small first-lien loan on a home that is nearly paid off. The cutoff is set every year, and the agencies' threshold adjustment rule ties it to CPI-W.

A simple example: a borrower takes a $30,000 higher-priced first-lien loan in 2026. Because $30,000 is below $34,200, the Regulation Z interior-visit appraisal rule and the second-appraisal rule for flips do not apply. A $36,000 loan with the same pricing would be covered, assuming no other exemption applies.

What the exemption does not do

Being under the threshold does not mean the lender will skip a valuation. Several other layers of rules still apply:

• Lender and investor standards. Lenders usually want to know what the collateral is worth before they lend against it. Loans sold to Fannie Mae or Freddie Mac, and FHA, VA and USDA loans, follow those agencies' appraisal or waiver rules no matter how big the loan is.
• Bank regulators' appraisal rules. Federally regulated lenders also follow separate interagency appraisal rules, which can allow a less formal "evaluation" instead of a full appraisal for smaller home loans. Those rules have their own thresholds that are unrelated to the $34,200 figure.
• Your right to copies. Under the Equal Credit Opportunity Act rules in Regulation B, section 1002.14, lenders must promptly give applicants copies of appraisals and other written valuations made for a first-lien loan on a home. They must do so at least three business days before closing, unless the borrower waives that timing. This right applies whether or not the loan is higher-priced.

In other words, the exemption removes one set of extra protections. It does not remove every valuation, and it does not take away a borrower's right to see the valuation.

Why the threshold changes each year

When the agencies wrote the small-loan exemption, they tied it to inflation so that it would not shrink in real terms. The CPI-W reading as of June 1 each year sets the next year's number, and the agencies typically announce it late in the year. The 2025 figure was $33,500, and the 2026 figure is $34,200. The agencies have not yet announced a 2027 figure as of this writing.

What borrowers should do

• Ask your lender whether your loan is a higher-priced mortgage loan. The rate and APR on your Loan Estimate are the starting point.
• If you are buying a recently flipped home with a higher-priced loan above the threshold, ask whether a second appraisal is required.
• Whatever the loan size, ask for copies of every appraisal or valuation, and read them before closing.
• If you think the value is wrong, ask the lender how to request a reconsideration of value, and share comparable sales.

Borrowers with questions can review the CFPB's consumer resources or contact a HUD-approved housing counselor.

Archival photo of a split-level suburban house in Cheektowaga, New York, December 2022, used for illustration only. Photo: Andre Carrotflower via Wikimedia Commons, CC BY-SA 4.0.