A federally related transaction is defined as any real estate-related financial transaction that involves a federal financial institution regulator, such as the Federal Deposit Insurance Corporation (FDIC), Federal Reserve, Office of the Comptroller of the Currency (OCC), or any transaction intended for sale to a government-sponsored enterprise like Fannie Mae or Freddie Mac.
Under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), federal agencies require that real estate appraisals used in federally related transactions be performed by state-licensed or state-certified appraisers.
In Maryland’s 60-Hour Pre-Licensing Course, this concept is taught within the “Real Estate Appraisal and Valuation” topic to ensure future licensees understand when a certified appraisal is legally mandated. The course emphasizes that federally related transactions generally include:
The sale, lease, purchase, investment, or exchange of real property.
The financing, refinancing, or use of real property as security for a loan.
Transactions regulated by federal financial agencies.
Therefore, the correct definition of a federally related transaction is a real estate transaction in which a federal financial agency or regulatory authority is involved.
Reference (Maryland and Federal Sources):
Maryland 60-Hour Principles and Practices of Real Estate Pre-Licensing Course – “Real Estate Appraisal and Valuation” Module (Appraisal Standards Section)
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Title XI – Appraisal Standards
12 U.S.C. § 3350 – Definitions (Federally Related Transaction)
