As part of its work to address discrimination in the home appraisal process, on November 17, 2021, HUD issued a Mortgagee Letter (ML Guidance) clarifying the existing requirements for appraisers and mortgage lenders to comply with the Fair Housing Act. The ML Guidance, titled Appraisal Fair Housing Compliance and Updated General Appraiser Requirements, updates and revises language in HUD’s Single Family Housing Policy Handbook 4000.1.
The letter is part of President Biden’s Interagency Task Force on Property Appraisal and Valuation Equity (PAVE), announced on June 1, 2021, which was created to address inequity in home appraisals and bring about systemic change in home appraisals and the homebuying process. HUD is among the agencies involved in the initiative.
The ML Guidance emphasizes the FHA’s expectations for Appraisers and Mortgagees to be knowledgeable about and to comply with all applicable anti-discrimination laws, including the federal FHA. Specifically, the clarified Guidance:
- Emphasizes compliance with all applicable laws including the Fair Housing Act and all other federal, state, and local antidiscrimination laws.
- Emphasizes the Mortgagee’s requirement to ensure the appraisal complies with all applicable laws including the Fair Housing Act and all other federal, state, and local antidiscrimination laws.
- Clarifies Appraiser requirements specific to Nondiscrimination Policies, and compliance with FHA guidelines and Appraiser Conduct.
More from this Newsletter Issue: Winter 2022
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