High Volatility Commercial Real Estate (HVCRE) rules that were collectively issued by the OCC, FDIC and Federal Reserve Board require regulated lenders to assign a risk weighting of 150% when determining reserve requirements for certain acquisition, development and construction loans (known as “high-volatility commercial real estate exposures”). The reserve requirements apply throughout the life of the loan, even after construction has been completed.
According to the rule, increased reserve requirements do not apply to:
- One-to-four-family residential properties;
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Bill Tryon
As Director of Strategic Development, Bill Tryon focuses on advancing key risk management initiatives from an environmental, engineering and construction risk standpoint. Bill has a long track record of innovation, and hopes to educate the industry on best practices to control risks, reduce costs and create a competitive advantage. Through The Science of Real Estate forum, Bill will provide regular updates from across the CRE risk management world.
