Which of the following best describes federally related transactions?

Federally related transactions are defined primarily by their requirement for compliance with federal regulations. These transactions typically involve one or more parties that are regulated by federal financial authorities, such as government-sponsored enterprises or federal banks. When an appraisal is necessary, it ensures that the property valuation meets the standards set forth by these agencies. This appraisal requirement is particularly important to mitigate risks and maintain the integrity of the lending process. Therefore, the answer focused on transactions that necessitate an appraisal for a federal financial regulatory agency accurately captures the essence of federally related transactions.

In contrast, the other options do not align with the definition of federally related transactions. Transactions involving only private lenders do not involve federal regulatory oversight, making them outside the scope of federally related transactions. Rental agreements that do not involve property management do not typically need federal regulations to apply, and cash sales, while they may occur, do not inherently involve federal regulatory requirements. Thus, it is essential to recognize that the importance of appraisals in federally related transactions comes from their regulatory framework and the standards required by federal entities.