Appraisal Industry Improvement Act
The Appraisal Industry Improvement Act would expand who can perform appraisals for mortgages insured by the Federal Housing Administration (FHA) by authorizing State-licensed appraisers to conduct FHA-related appraisals, rather than limiting to FHA-approved or federal-appraiser personnel. It establishes mandatory education and competency standards aligned with USPAP and FHA’s appraisal requirements, with a formal implementation timeline for HUD to publish necessary guidance. The bill also creates a pathway for State credentialed trainee appraisers, updates registry and fee provisions, and provides new grant funding to support workforce training. Additionally, it broadens the Appraisal Subcommittee’s (ASC) oversight to include additional federal programs and affirms a more explicit role for several housing-related agencies. Overall, the bill aims to widen the pool of qualified appraisers, improve training, and streamline FHA appraisal processes while maintaining control through federal standards.
Key Points
- 1State-licensed appraisers can conduct FHA mortgage appraisals, with requirements that they be licensed in the state where the property is located, meet USPAP competency standards, and demonstrate verifiable education on FHA appraisal requirements (through FHA-provided courses or approved programs). Federal employees choosing state licensing may be licensed in one state for federal duties.
- 2New education and competency regime: appraisers must meet the amended 202(g)(5) standards, including a path for prior appraisers to demonstrate competency through pre-existing training, with HUD issuing guidance within 240 days and an effective date within 180 days after guidance.
- 3State credentialed trainee appraisers: creates a statewide trainee credential, adds trainee appraisers to the national registry, and allows certified appraisers to use trainees in performing appraisals. Trainee programs may have an annual registry fee (not more than $20) and are not required for every state.
- 4Grants for workforce and training: authorizes grants to state appraiser certifying/licensing agencies to support education, training, and other workforce development activities.
- 5Appraisal Subcommittee and agency scope: updates the list of agencies interacting with the ASC to include the Department of Veterans Affairs, Rural Housing Service (USDA), and the Department of Housing and Urban Development (HUD).