We believe you should use Regulation B’s definition of “dwelling” with regard to the ECOA’s appraisal notice requirements.

Although the ECOA does not define “dwelling,” its implementing rule, Regulation B, defines the term to mean “a residential structure that contains one to four units whether or not that structure is attached to real property. The term includes, but is not limited to, an individual condominium or cooperative unit, and a mobile or other manufactured home.”

In its comments to its final rule, the CFPB clarifies that Regulation B’s appraisal requirements do not apply to groups of dwellings such as a condominium complex. In addition, we are not aware of any law or guidance indicating that the definition of dwelling (triggering the appraisal notice requirement) includes vacant land — notwithstanding an applicant’s indication that someday a dwelling “might be built” on that land.

We note that certain disclosure requirements in Regulation Z do apply to vacant land, but Regulation Z and Regulation B should not be conflated. We also note that even if Regulation B’s appraisal notice requirement does not apply to a particular loan, the loan still may be subject to the FDIC’s regulations regarding appraisals. In other words, although you may not be required to provide an applicant with a copy of the appraisal, you still may be required to obtain an appraisal.

For resources related to our guidance, please see:

• ECOA, 15 USC 1691(e)(1) (“Each creditor shall furnish to an applicant a copy of any and all written appraisals and valuations developed in connection with the applicant’s application for a loan that is secured or would have been secured by a first lien on a dwelling promptly upon completion . . . .”)

• ECOA, 15 USC 1691(e)(5) (“At the time of application, the creditor shall notify an applicant in writing of the right to receive a copy of each written appraisal and valuation under this subsection.”)

• Regulation B, 12 CFR 1002.14(b)(2) (“The term ‘dwelling’ means a residential structure that contains one to four units whether or not that structure is attached to real property. The term includes, but is not limited to, an individual condominium or cooperative unit, and a mobile or other manufactured home.”)

• Regulation B Appraisal Amendments, Final Rule, 78 FR 7236 (January 18, 2014) (“With respect to the example raised by a creditor and two national creditor associations—three four-unit buildings operated as a 12-unit apartment complex, the text of the rule makes clear that a four-unit residential building would be a dwelling, but a 12-unit apartment complex is not. Thus a transaction secured by a four-unit residential building would be covered by the rule, but a transaction secured by the entire 12-unit apartment complex would not be.”)

• CFPB Integrated Mortgage Disclosures, Final Rule, 78 FR 79793 (December 31, 2013) (“The Bureau believes that including 25-acre loans, vacant-land loans, and construction-only loans within the scope of the integrated disclosure requirements effectuates the purposes of TILA under TILA section 105(a), because it would ensure meaningful disclosure of credit terms to consumers and facilitate compliance with the statute.”)

• 12 CFR 323.3 (“An appraisal performed by a State certified or licensed appraiser is required for all real estate-related financial transactions except those in which: . . “)

• 12 CFR 323.2(i) (“Real estate-related financial transaction means any transaction involving: (1) The sale, lease, purchase, investment in or exchange of real property, including interests in property, or the financing thereof; or (2) The refinancing of real property or interests in real property; or (3) The use of real property or interests in property as security for a loan or investment, including mortgage-backed securities.”)