FHA to Codify Certified Appraiser Requirement

The US Department of Housing and Urban Development (HUD) unveiled a proposed rule in the Federal Register to ensure the agency’s rules conform with the Housing and Economic Recovery Act (HERA) of 2008. The proposed rule requires that appraisers approved by the Federal Housing Administration (FHA) be certified, rather than licensed, by a state appraisal licensing board in order to provide appraisals for mortgages insured by FHA. Comments are due September 12, 2011.

While this proposed rule will officially make HUD in compliance with HERA, the agency has been using only state-certified appraisers for some time. Mortgagee Letter 2008-39: Revised Eligibility Requirements for FHA Roster Appraisers was released on December 17, 2008. The ML stated that all appraisers performing FHA appraisals must be state certified by October 1, 2009.

FHA will not, however, recognize appraisers certified by a “nationally recognized professional appraisal organization” in lieu of certification by a state appraisal licensing board. While HERA provides this flexibility, the proposed rule states that FHA will accept only appraisers certified by the state to “prevent disruption and to ensure efficient processing of mortgage insurance.”

Effective October 1, 2008, FHA stopped accepting applications to the FHA
Appraiser Roster from licensed but uncertified appraisers.  All applicants for the
FHA Appraiser Roster must be state certified (certified residential or certified
general) appraisers who meet the minimum certification criteria issued by the
Appraiser Qualifications Board (AQB) of the Appraisal Founda
  1. Jack

    Who would be a member of a nationally recognized appraisal organization and not be certified by the State? That was a preposterous thought to begin with.

  2. Dan Wilson

    I must be brain dead as I do not understand what this even means?

  3. Sylvia

    Don’t some state require an appraiser to be licensed, rather than certified? Or are licenses only for trainees?

  4. Michelle Bradley

    States had the option to chose Certified General, Certified Residential, Licensed Appraiser and Appraisal Trainee many years ago when requirements were mandatory. These credentials are the only ones recognized by The Appraisal Foundation. PA does not have the Licensed Appraiser category, but our legislature recently passed a bill that now requires Appraisal Trainees to be licensed. FHA has, for quite a while, only permitted Certified Appraisers to do FHA work. If you are a Licensed Appraiser, you are not permitted to do FHA work. You have the option to upgrade your credentials to be a Certified Residential or General appraiser in order to continue to do FHA work.